BCE's bidding process fails to even meet Teachers' own governance rules for like transactions

It would appear that the procedures followed in BCE’s sale to Teachers’ do not comply with Teachers’ own corporate guidelines under Section 3.2 "Going Private Transactions," "Leveraged Buyouts" And Other Purchase Transactions, available by clicking here.

And which states:

“In addition to such an economic analysis, we will review the process by which the proposal was received. In this regard, we will consider whether:

* Other potential bidders have had an opportunity to investigate the company and make competing bids”

And since it has been reported in MACLEANS magazine (Canadian Press) that:

“The directors of BCE Inc. were kept in the dark about offers for the telecom giant by managers and advisers who manipulated the bidding process to freeze out bondholders in the sale of the company, lawyers for the bondholders said Monday.

The court was reminded that three BCE directors - Tom O'Neill, Jim Pattison and Donna Kaufman, the head of the strategic oversight committee - testified they were unaware or couldn't remember seeing all the details of the bids or how they would affect all stakeholders.”

As well as the following suppressive action by BCE concerning a “competing bid”, which was never disclosed to shareholders or the reasons behind its non-adoption:

Catalyst's Bell bid silenced
Barry Critchley,
Financial Post
January 30, 2008

Surely these standards that Teachers' laid down for other issuers to adhere to in like circumstances in which Teachers is a passive shareholder, apply equally to situations like BCE where Teachers' is driving the bus, or will it be a case of the shoe is now on the other foot?

Today's situation and fact pattern will be a true test of whether Teachers' actually believes in good corporate governance for all, or simply as a point of leverage for Teachers' as a large shareholder seeking advantage over other smaller shareholders.

That's actually a very easy moral question to answer. Simply ask any of Teachers' 271,000 pension beneficiaries, and they will tell you that no one likes a schoolyard bully. That's as true for Canada's public capital markets as it is for the school yard jungle jim.