Comments on: Will The BCE Takeover Go Through?

By: Nicolas

Nicolas — Thu, 19 Jun 2008 16:34:20 +0000

We’ll have the a good idea what the answer will be on Friday at 16h30.

http://csc.lexum.umontreal.ca/fr/news_release/2008/08-06-19.2/08-06-19.2.html

By: Cash Canuck

Cash Canuck — Sat, 31 May 2008 06:53:25 +0000

Nobleea;

Annualizing that return is very important, I agree. From a pure takeover-play perspective though, the BCE deal becomes less attractive as the process grinds onwards. As the delays mount, that annualized return plummets, even though you may still get the full offer price.

By: Nicolas

Nicolas — Mon, 26 May 2008 22:18:47 +0000

Makes perfect sense. And this BCE thing is a once a year(s) event.

By: Nobleea

Nobleea — Mon, 26 May 2008 21:09:29 +0000

Nicolas;

Enough to cover all the commissions and leave some extra cash in the pot. No taxes, it’s in an RRSP account.

What is a ‘good deal’? I say any dollar amount, that you wouldn’t have other wise had, is a good deal. It worked out to a ‘trivial’ 2% return after all was said and done. I like to annualize it – something like 5000%. Of course, that implies that I’d have to do a trade like that every day the markets are open. However, just doing it once a year would be the same as going with a low cost ETF or a high MER mutual fund. And those in the PF blogosphere spend many an entry/comment discussing that.

By: Nicolas

Nicolas — Mon, 26 May 2008 20:23:57 +0000

Nobleea

Out of curiousity, you says you sold for a bit less than a dollar gain. How many did you sell for this to be a good deal?

Cask Can, you make a good point about the risks of such mega-takeovers. On the other hand, with all those different steps (CRTC/Courts/Industry Canada), such an event can be very profitable for those familiar with the regulatory and legal dimensions of this transaction.

By: Al

Al — Mon, 26 May 2008 14:58:34 +0000

I’ve held BCE stock for a long time and voted in favour of the takeover at $42.75 per share. If the price is to change from that, another vote should be required which may or may not go through. I’m not sure what my personal threshold is, but then I don’t own nearly enough for it to matter.

By: Cash Canuck

Cash Canuck — Sun, 25 May 2008 19:09:27 +0000

I think BCE is a good example of what to be wary of when you’re doing Buffet-style takeover arbitrage (buying a stock below the takeover price). You have to factor in the likelihood of the deal falling through.

With mega-takeovers like this one, I think there are a lot more interested parties, and a lot more hoops to jump through to get the deal done.

With credit markets being so tight, I think big takeovers are going to be few and far between and it’s likely that opportunities like this won’t come up too often in the near future.

By: Four Pillars

Four Pillars — Fri, 23 May 2008 19:40:18 +0000

Nobleea – good question. I can’t see it getting as low as $25.

Mind you, BMO was yielding about 6% at its lowest point a few months ago.

By: Nobleea

Nobleea — Fri, 23 May 2008 19:22:17 +0000

I must be reading something wrong here. The web sources I read say BCE is currently yielding 4.5% (at 33$ share price). Do you think investors would let it get down to 25$? Would that not give a yield of almost 6%? Regardless of what happens with the takeover.

I bought BCE yesterday at 32.27 and sold today at 33.15.

I think the deal will go through, but at a lower price. Maybe in the 39-40$ range. And perhaps not by June 30.

By: Four Pillars

Four Pillars — Fri, 23 May 2008 17:43:05 +0000

Telly – I really didn’t think it was a bad move to buy some BCE, especially if it was a small amount.

GIV – there is not guarantee that anyone will buy BCE.