BCE Deal is Dead

When the BCE take over bid was first launched there was a lot of hype around the take over.  Even I thought that BCE might have been a arbitrage buying opportunity between the share price and the merger cash price.  However, with the down turn in the credit markets and economy in general, the BCE deal has been declared dead.

Giveaway Reminder

Earlier this week we celebrated 2 years of Million Dollar Journey.  To give thanks to the readers, I have arranged for $450 worth of prizes to be given away.  If you haven’t already, you can enter the giveaway here.

Weekend Reading

Money Grubbing Lawyer has an article about re-gifting.  As I’ve also written about this before, I agree completely.  Re-gifting is a great idea.

Thicken My Wallet does an analysis of Fortis (FTS).  According to The MoneyGardener, it appears that they have recently raised their dividend.

Canadian Capitalist asks “are you a de-value investor?”

Canadian Dream gives us some tips on how to get a really low power bill.

Four Pillars has a great post explaining the current automotive bailout fiasco.

WhereDoesAllMyMoneyGo explains the FTSE RAFI.

Michael James and Money points out that the stock market and the economy are not the same thing.  Historically speaking, stock markets usually turn around before the economy does.  Hopefully that is soon!

The Financial Blogger gives us financial steps for couples!

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  1. http://resourcesandmoney.blogspot.com on December 12, 2008 at 8:47 am

    I will be joining the give-away.. Hope i win..

  2. Michael James on December 12, 2008 at 10:00 am

    Thanks for the mention. That’s too bad about the BCE deal. I know a few people who hold stock and had little understanding of the risks.

  3. Four Pillars on December 12, 2008 at 10:14 am

    Thanks for the mention – I think my auto bailout post was the longest one I’ve ever done! :)

    Also – I bought some BCE last week at $22.28. I’m assuming they will reinstate their dividend which was a fairly generous one.

    I was one of the many who considered buying BCE when it was at $37+ but I didn’t think the limited upside was worth the larger downside if the deal didn’t go through.

  4. Nurseb911 on December 12, 2008 at 12:08 pm

    FT!! Thanks for the mention (indirectly) to my guest post over at CC.

    I hear you’re cooking up a recession recipe sometime next week – looking forward to it maybe for my Super Bowl Party in a few months! ;)

  5. Aman on December 12, 2008 at 2:23 pm

    Re-gifting is excellent and not tacky. You are finding use rather than stuffing an item in the back of the closet or into the trash.

    On the other end BCE fallout was one surprise. I wish I knew and could have shorted…oh well…hopefully some light will come from this mess..got in at roughly $17.93US. Waiting for more info on the BCE share buyback at the moment.


  6. Finance_Addict on December 12, 2008 at 6:11 pm

    FT: I was and still am invested with BCE. Clearly not many knew the existence of the solvency clause. However I am still confident despite the big drop that BCE will turn out to be a very good long term hold as we get paid a strong stable yield to wait. However you might want to be careful in pointing out the obvious about the deal and how you avoided the temptation as there are many investors who were not as “lucky” as you were. Clearly there are many upset BCE investors. Instead you may want to also point out how you bought Teck as they too were in a similar situation but now face a much bleaker path forward compared to BCE?

  7. FrugalTrader on December 12, 2008 at 8:10 pm

    Finance_Addict, where did I say that I was “lucky” to avoid the BCE mess? I am very open about my trades, and I’ve made many mistakes. Who’s to say that I didn’t jump into the BCE merger arbitrage after my post?

  8. The Financial Blogger on December 12, 2008 at 10:49 pm

    hey Thx for the mention!

    Congrat on the 2 years… $450… I will have to be more generous next year ;-)



  9. Finance_Addict on December 13, 2008 at 1:06 am

    I suppose it was this comment from you on Nov 26:

    wearyBear, I’m happy that I didn’t buy into this one. :) As of today, they are predicting that the deal will not be completed by Dec 11th and there is even speculation that the deal will fall through.

    Regardless…you are clearly open with your trades. No negative tone intended. I’m a big fan of your site.

  10. Sarlock on December 13, 2008 at 3:40 pm

    And now we know why there was a risk spread between share price and buyout price…

  11. Dividend Growth Investor on December 13, 2008 at 3:52 pm

    Merger arbitrage is a very tricky business. I made double digit gains from CEG. However on my next deal for ROH i am sitting at a 5% loss. The problem is always that if the deal doesn’t go through the stock will be at least 50% lower than the offer price. The positive for BCE however is that they are reinstating the dividend and are starting a share buyback. The quarterly payment is 0.365/share, which at 17.40% nets to about 8% dividend yield. Based off last years earnings of 4.44 share it seems that the payment is also adequately covered..

  12. poker books on December 15, 2008 at 2:40 pm

    thanks for the information i will apply that.

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