The Successful Investor Hotline – Friday, March 14, 2008

Article Excerpt

BCE INC. $37.24, Toronto symbol BCE, gained 7% this week after a Quebec court dismissed a class-action lawsuit launched by the company’s bondholders. The ruling improves the chances that the $42.75-a-share takeover by a group led by the Ontario Teachers’ Pension Plan will succeed. The stock is now trading at roughly 13% below the offer, partly because the deal still requires regulatory approval. In addition, the problems in the credit markets could also make it harder for the consortium to issue the bonds it needs to finance the takeover. If the deal falls through, BCE’s stock could fall to its pre-takeover level of around $30. However, the company’s operations still generate plenty of cash flow, and it could unlock value by spinning off some of its operations. BCE is still a buy. BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $29.87, Toronto symbol BA.UN, is 45% owned by BCE. If the BCE takeover succeeds, BCE’s new owners may sell their Bell Aliant stake to raise cash…