It's Baa-aaack! BCE Deal Talk Returns with Merger Speculation

An RBC analyst speculates that BCE Inc. (BCE) will merge with Telus:

With as many as five new wireless carriers launching service in Canada during the next year, the Competition Bureau is likely to see less market power for incumbents, paving the way for a merger between BCE Inc. and Telus Corp.

That’s the view of RBC Capital Markets analyst Jonathan Allen, who told clients that the rationale for a tie-up between the two telecom players is becoming more apparent.

He highlighted wireless as what has been the biggest hurdle to getting such a deal through the regulator. But the environment has changed significantly from two years ago, when significant divestitures would have been required.

“The more disruptive the new entrants are, the better the merger odds will be,” the analyst said.

This would be a "merger of equals" -- which could be great for shareholders. But not as clean as the cash buyout the Ontario Teachers' group was offering BCE shareholders previously. I like cash deals because they're simpler for me to deal with. I just take the money and if I want in, I just buy the stock. That, of course, wouldn't have been an option with the Ontario Teachers, because they wanted to take BCE private.

If BCE and Telus tie the knot, I'll wait and see.

I note this is just speculation and one report said any deal would take place in the next 24 months. In the meantime, I'm content with BCE. And collecting the dividend payable in Canadian dollars -- which is comforting since the American ones could one day become pesos. ;-)