Business World

If relief was the first emotion the would-be buyers of BCE Inc (BCE.TO: Quote, Profile, Research, Stock Buzz) (BCE.N: Quote, Profile, Research, Stock Buzz) felt after Friday’s court decision allowing the $34.1 billion deal to proceed, anxiety may have been the second.

That’s because questions remain about whether the deal will now go through and, if so, at what price.

Pinning down final financial terms for the deal — with a June 30 deadline looming and credit markets tight — could still create trouble for the world’s biggest leveraged buyout.

The deal may be renegotiated at a lower price or may even fall through if the banks that committed to financing the debt portion and the private equity buyers of BCE, Canada’s largest telecommunications company, are unable to reach an agreement.

“In this credit market, that’s a hell of a lot of financing that has to happen and (whether the deal will get done) is a big question mark,” said Marshall Sonenshine, chairman of New York-based investment bank Sonenshine Partners payday loans lenders.

“Nobody should be cavalier in this market about predicting the completion of a $34 billion deal,” he said.

The once-frothy leveraged buyout market was knocked out cold by last summer’s subprime mortgage contagion, which eventually killed investor appetite for the high-yield loans and bonds used to finance such deals.

Wall Street banks were thus stuck with billions of dollars in leveraged loans and forced to write down the value of loans in a number of leveraged buyouts, leading to tension between them, the private equity buyers and target companies. 

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