"We Will Be There With Our Money"

So said Toronto-Dominion Bank CEO Edmund Clark after the bank's annual meeting in Calgary. Bloomberg also reports:

The bank said in July that it committed C$3.3 billion, or about 10 percent, of the C$34.3 billion credit line for the BCE transaction, which BCE says is expected to close by June. The Toronto-based bank also said it will buy C$500 million in BCE stock.                  

"So far we haven't seen,'' any changes in the terms, Clark said. "We're not the drivers in that, and so I think our position is, we will be there with our check for the equity, and we will be there with our check for the debt. And we'll be interested to see if other people show up with their checks or not.''

BCE (BCE/NYSE) has been consistently trading at a discount to the C$42.75 announced buyout price, fueling speculation that the deal won't go through as planned.

That speculation turned to rampant pessimism with the recent Clear Channel stalled buyout.

Still, Clark's statement combined with Ontario Teachers' CEO Jim Leech insisting the BCE deal is different from Clear Channel's gives me even greater confidence the purchase will go through. (Of course, the fact that I fortunately bought BCE at the low price of US$23.01 forms the foundation of that confidence.)

What if the deal doesn't get done? Some folks will be eating crow. Especially a couple of CEOs north of the border.

Comments

[Sivaram Velauthapillai]

I took a risk arbitrage position so not the same comfort zone as you :) but I have always felt the Canadian parties wouldn't back away since they haven't faced as much of a loss from the credit crisis. The real question are the other parties. I don't know if you saw this blog entry from G&M speculating on who may decide to walk:

http://www.theglobeandmail.com/servlet/story/RTGAM.20080404.WBstreetwise20080404075003/WBStory/WBstreetwise

[John]

Sivaram: No, I hadn't seen it, thanks for posting it. Good point about the concern being the non-Canadian parties.

Well, if the deal doesn't go through it won't be the end of the world. BCE should be a fine holding over time.

[slick]

"And we'll be interested to see if other people show up with their checks or not."

Hardly instills confidence.

Why would anyone interpret his comments as bveing positive?

I'm long BCE - and hope the deal closes. But Clark didn't say anything relevant re: the outcome. The big question is what the *US* lenders will do - not the Canadian.

[John]

slick: Sivaram pointed that out, and I agree with you and him that the non-Canadian parties are key.