Wednesday, November 21, 2007
Market doubting Bell going private
The stock market appears to be pricing BCE with increased risk.Let's review. The deal from Ontario Teachers Pension Plan will provide shareholders with $42.75 per share. There are likely 2 dividends to be received between now and closing, for a total of another 65 cents. Assuming the deal is finalized in April, each share is worth $43.40.
As recently as a couple weeks ago, BCE traded for a little over $41.20. Right now, it is around $39.40. If the deal goes through, investors would make $4, a little over 10% in about 5 months, for a current yield of around 25%.
Does the recent drop mean that more investor sentiment is questioning whether the privatization will actually close?
Update [November 26, 5:00 pm]
Barron's today agreed with the view that Bell is an interesting arbitrage opportunity.
Technorati Tags:
Bell
Posted by Mark Goldberg @ 11/21/2007 02:07:00 PM 
Syndicate
