It was merely a matter of time before the ripple effects of the credit crunch started to negatively impact some of the “privatization”/buy-out deals of telecommunications companies. Bell Canada’s parent, BCE, is now experiencing issues with their buy-out. Melinda Peer has details in her report on how BCE and KPMG disagree on how the deal is currently structured.
Personally I find it interesting that many of these deals (like those at Chrysler, etc) are finding the accountants and the financiers now getting cold feet. I understand the “whys”, but I still find it interesting that the pendulum has swung so far back to a concept of “risk avoidance” at all costs after an almost reckless period of time relating to anything goes “risk tolerance”.
These “privatization” deals represent a significant opportunity to break from the drivers of Wall Street to rebuild telecom business models based on the future rather than the next quarter.
The happy medium for both the telecom deals and the overall finance market is to actually look at the risks and understand the tolerance correctly. Hopefully (knock on wood), the global finance markets return to a certain amount of “sanity” in early 2009 to complete some of these “privatization” deals
Posted November 28, 2008 8:00 AM
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