How the World’s Biggest Buyout Deal Crashed and Burned - The Bell Canada LBO War Story

The years leading up to the 2008 financial crisis were filled with ever more ambitious Private Equity deals. Bloomberg has compiled the story of the attempted buyout of Bell Canada.

But to hear the bankers and LBO artists tell the story of their $49 billion leveraged buyout of Bell Canada Enterprises Inc., you’d think they were reliving the adventure of their professional lives.
And they were.

The Bell Canada deal was announced just as the bull market and economic boom came to an end

Announced on June 30, 2007, the takeover of Canada’s largest telecommunications company, BCE Inc., the parent of Bell Canada, topped the $48 billion buyout of Texas utility Energy Future Holdings announced that February. 

As the credit markets fell out of bed, so did the deal..

SABIA:This deal is a window into the thought processes that eventually caused the financial crisis. It’s a nice, little—well, not little—vignette about how a lot of folks in the financial sector [thought] about what risk meant, what leverage meant. People thought that leverage was a completely benign thing. They were wrong then and they’ve been proven to be wrong, and they’re still wrong.

 

You can find the full article here. A really captivating deal tale:

How the World’s Biggest Buyout Deal Crashed and Burned - The Bell Canada LBO War Story