The CRTC has postponed the hearings for the proposed $52-billion takeover of BCE Inc by the Ontario Teachers Pension Plan until March 11. The main reason is the CRTC is still looking for proof that the country’s largest telecom organization will continue to be controlled by Canadians.
Ontario Teachers Pension Plan CEO, Jim Leech said “We have taken into consideration your request that we enhance the ‘Canadian-ness’ of the board and of this selection process. Although it is our expectation that selection of independent directors will proceed on the basis of consensus, if unanimity cannot be achieved in respect of this independent director, Teachers’ can never be outvoted.”
CRTC approval is required before a consortium of the Teachers and its U.S. private equity partners – Providence Equity Partners, Madison Dearborn Partners – along with Merrill Lynch are able to assume the ownership of BCE’s broadcasting assets.
The commission, headed by chairman Konrad von Finckenstein, raised 12 concerns about the proposal during Monday’s hearings. Leech said his group has addressed all but one that “raises fundamental corporate governance concerns.”
Other proposed changes include:
-The board chairman must be designated by a Canadian shareholder, even though the person doesn’t have to be Canadian.
-The board will always include at least two independent board members.
-A second Teachers designee will be added to the executive committee to ensure it has a majority of Canadians, even though it has no decision-making powers and its role is very limited.
BCE shares gained 48 cents to $36.98 in trading Tuesday on the Toronto Stock Exchange. Amid recent uncertainty about the takeover, the value is far below the $42.75 offered in the takeover deal.