BCE’s Trust Plan Aims to Unlock Value

Article Excerpt

BCE INC. $29 (Toronto symbol BCE; SI Rating: Above average) has struggled in the past few years due to increasing competition in its core telephone business, which supplies 40% of its revenue and half of its profit. It also suffers from a “holding company discount”: the current price of the stock is less than the total value of its various assets (wireless, Internet, satellite TV, etc.). Selling or rearranging these assets would give BCE more cash and/or income, and let it focus on its core operations. Older businesses go into new trust BCE now hopes that several recent announcements will simplify its operations and spur the stock price. The latest is a proposal to form a new trust that will hold its rural telephone lines in Ontario and Quebec. The new trust will also hold the land-line business of 53.2%-owned Aliant Inc., which is the main telephone company in Atlantic Canada. BCE will own 73.5% of the new trust, but that will…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.