Telecom Trends: What is Teachers learning?

Tuesday, January 22, 2008

What is Teachers learning?

What is Teachers learning about their bid to take Bell private? [Note to all grammar students: since Teachers is a proper noun, "Teachers" is singular - referring to the pension plan, as opposed to the collection of teachers - lower case - that would be treated in the plural]

Two months ago, I wrote that the markets were doubting Bell's privatization would go through.

Talk about understatement.

At that time, Bell stock was trading at $39.40. Yesterday, it fell to 33 and change.

In November (when I decided to buy some - full disclosure), the yield was around 25%. Now, should the deal go through at the official offering price, the annualized yield will be over 100%.

The deal from Ontario Teachers Pension Plan is supposed to provide shareholders with $42.75 per share. There is likely another dividend to be received between now and closing, for a total of another 37.5 cents. Assuming the deal is finalized in April, each share is worth about $43 - nearly $10 more than yesterday's price, for a return of better than 30% in 3 months.

Bell issued a statement in December to try to calm the markets. Any updates?

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Posted by Mark Goldberg @ 1/22/2008 07:48:00 AM

Comments:

I hate to say it, and I'm sure you saw it, but if Sean Silcoff has it right as set out in his column in today's Financial Post, there may not be a deal and you'll be left with an almost $10 per share loss instead of the gain you're projecting. This is what I was alluding to in my comments on your entry of Jan. 11th. As a friend, I say I truly hope Silcoff's scenario doesn't come to happen.

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