BCE Buyout on the Rocks - Part II

The BCE buyout is looking less likely, as a Canadian court ruled yesterday in favor of the bondholders who challenged the LBO, claiming that BCE hadn't taken their interests into account. This is shocking news indeed, and this time I really mean it. The fact that the deal probably wasn't going to be completed at the old price is old news. You can read about my initial skepticism in Part I of BCE Buyout on the Rocks. But the fact that the deal was blocked by a court ruling in favor of the old bondholders and not the new lenders is what makes the news notable. Coincidentally, the court ruling was delivered on the same day that the private equity sponsors were busy fighting with the lenders in New York, who were demanding better terms on the financing package. This was Canada's gift to Wall Street. If anyone is out on the town in New York tonight, look for bankers from C, DB, and RBS. Tell them you're Canadian, and they'll probably buy you round after round of Cristal and you can feel like P. Diddy for one night.