Yahoo Finance BCE Alerts Shareholders About TRC Capital's Mini-Tender Offer
BCE Inc BCE recently announced that it has received notice of an unsolicited mini-tender offer from TRC Capital Investment Corporation (TRC Capital) to buy up to 2,500,000 BCE common shares, representing roughly 0.3% of the company's outstanding shares.
The offer price of C$43.40 per share is significantly below the current market price, suggesting a discount of around 4.43% and 4.44% to the closing prices on the Toronto Stock Exchange and the New York Stock Exchange, respectively, on Jun 24, 2024 — the last trading day before the offer was initiated.
BCE has made it clear that it does not promote this unsolicited offer and has no association with TRC Capital or its offer. The company is requesting shareholders to act with discretion and refrain from tendering their shares to this unsolicited offer.
Mini-tender offers, similar to the one made by TRC Capital, are designed to fend off the investor protections, including disclosure and procedural requirements, that are typically applicable to most take-over bids and tender offers under Canadian and U.S. securities laws.
Both the Canadian Securities Administrators and the U.S. Securities and Exchange Commission have shown concerns about mini-tender offers, highlighting the probability that investors might tender their shares without fully understanding the true market value of their securities relative to the offer price.
BCE is one of the leading telecommunications brands in Canada, offering a broad range of innovative products and solutions from broadband Internet, wireless, TV, media and business communications services to consumers, businesses and government.
For the past month, BCE has been at the forefront of innovations through strategic acquisition and collaboration. In June 2024, BCE’s Bell Media partnered with TikTok to introduce Pulse Premiere in Canada. The initiative empowers advertisers to draw maximum eyeballs by displaying their ads adjacent to Bell Media's high-engagement content across prime categories such as sports and entertainment.
Bell Media acquired OUTFRONT Media Inc.’s Canada-based business for C$410 million in cash. Per the company, the acquisition is expected to strengthen its foothold in the out-of-home sector.
However, BCE’s huge debt burden is a concern. As of Mar 31, 2024, it had C$789 million in cash and C$31,283 million of long-term debt compared with the respective tallies of C$547 million and C$31,135 million at the prior-quarter end.
Furthermore, management anticipates its 2024 bottom line to be adversely impacted by higher depreciation, amortization expense and interest expenses coupled with lower gains from the sale of real estate. Prolonged weakness in the Media segment owing to lower subscriber revenues is a major concern.
In the last reported quarter, BCE’s revenues fell 0.7% year over year to $C$6,011 million ($4,458.9 million) owing to a 1.6% decline in Product revenues, totaling C$819 million, and a 0.6% fall in Service revenues, equivalent to C$5,192 million. For 2024, management projects revenues to stay flat to grow 4%.
BCE currently has a Zacks Rank #4 (Sell). Shares of the company have lost 29.61% in the past year compared with the sub-industry’s decline of 13.28%.
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