BCE Repurchases Interest in Bell

BCE Inc., Canada’s largest communications company, reached a negotiated agreement with SBC Communications Inc. of San Antonio, Texas that will lead to the repurchase of SBC’s 20 per cent indirect interest in Bell Canada for $6.32 billion. Under the terms of the agreement, which closed on June 28, 2002, the initial payment for the repurchase for cancellation of approximately 4 per cent is valued at $1.33 billion. SBC subsequently acquired, by way of private placement, $250 million of shares of BCE common stock on July 15, 2002.
BCE and SBC have also entered into an agreement that gives BCE the right to purchase SBC’s remaining approximately 16 per cent interest during a one-month period beginning October 15, 2002. The same agreement also gives SBC the right to sell its remaining interest to BCE during a one-month period beginning January 3, 2003. SBC would receive from either of these discretionary transactions a total of approximately $4.99 billion in cash, a series of notes from BCE with a maximum maturity of 18 months from the issue date and up to approximately $250 million in shares of BCE common stock. The exact composition of the payment would be at the discretion of BCE, within certain limits. In addition, BCE would purchase from SBC at face value approximately $314 million in outstanding notes on or before December 31, 2004. These rights supersede put and call arrangements that would have been applicable during the six months beginning July 1, 2002. A subsidiary of Ameritech Corporation, now owned by SBC, had purchased a 20 per cent interest in Bell Canada from BCE in June 1999 for $5.1 billion.
Ildo Ricciuto, assistant general counsel, compliance; Marc Ryan, corporate secretary; and Martin Cossette, legal counsel; and Davies Ward Phillips & Vineberg LLP acted for BCE, with a team that included Jean-Paul Bisnaire, Timothy Moran, Scott Hyman and Peter Hong (corporate) and Siobhan Monaghan (tax) in Toronto, Alan Golden, Hillel Rosen and Jodi Lackman (corporate) in Montreal, and Mark Connelly (corporate) in New York. BCE was also represented by Alan Dean (corporate) and Mario Verdolini (tax) of Davis Polk & Wardwell in New York, and in-house by Martine Turcotte, chief legal officer.
SBC was represented by senior in-house counsel Kristin Blomquist and Richard Dennis, and by Torys LLP with a team that included Beth DeMerchant, Philip Mohtadi, Adam Delean, Karrin Powys-Lybbe, Janie Tremblay and Phil de L. Panet (corporate), Jim Welkoff and Ron Nobrega (tax) in Toronto, and Andy Beck, Dan Miller, Geoff Gilbert, Bina Galal and Craig Pell (corporate) in New York.


Philip de L. Panet Alan Z. Golden Adam E. Delean Philip Mohtadi K. A. Siobhan Monaghan Andrew J. Beck Alan Dean J-P. Bisnaire Hillel W. Rosen Bina Galal Karrin A. Powys-Lybbe Peter S. Hong Mario J. Verdolini Geoffrey G. Gilbert J. Craig Pell Ronald E. Nobrega Timothy H. Moran Jodi A. Lackman Mark Q. Connelly Scott R. Hyman James W. Welkoff Janie Tremblay Matthew R.H. Snell


Davies Ward Phillips & Vineberg LLP Davis Polk & Wardwell Torys LLP Torys LLP