BCE Inc T.BCE.PR.E

Analyst comment

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Some analysts panned the latest deal. Scotia Capital analyst Maher Yaghi called it a “perplexing transaction” at a high price — more than 14 times next year’s estimated earnings before interest, taxes, depreciation and amortization, including synergies.
 

“Investors in Canadian telecom are in the sector for dividends and not in it to get growth; they can get it elsewhere,” Yaghi wrote. Buying Northwest Fiber is potentially dilutive to BCE’s free cash flow for years, he added, “and no dividend increases in the foreseeable future represents an important strategic change.”
 

BCE, which is based in the Montreal region, will assume C$2 billion of Northwest Fiber debt.