Some case questions are in the attachment. Thank you.
Questions: 1) 2) 3) 4) 5) Determine what BCE is worth to the three private equity consortiums based on relative comparable companies analysis (10 points) and comparable transactions analysis (10 points). Which analysis gives you a result that you prefer? (5 points) Calculate what BCE is worth to the three private equity consortiums based on DCF. For the DCF assume the sale of non-core assets (20 points). Do you prefer the result from the comparables analysis or the DCF? Explain why {5 points) From the perspective of the private equity rms, what is the potential IRR on the investment given the proposed initial investment and exit price assumed in the case? {10 points) From the perspective of the bidder: a} What challenges might arise in nancing such a large transaction? (10 points) b} What strategic considerations need to be taken into account relative to other bids? (5 points) c) What potential opportunities might exist to exit their investment in three to ve years? (5 points) From the perspective of BCE, how might the Strategic Oversight Committee weigh the prospect of an all-cash bid from a private equity bidder against a potential stock- and-cash bid from Telus? (5 points) What price might the committee feel was adequate given BCE's historical and recent share price performance? (5 points) How would the Committee ensure it was maximizing the value to BCE's shareholders? (10 points) \f1 510 mu 1 50.0 100.0 50.9 \"SM \"5!\" 1115mm: SIS-"1'1 HEIDI HEIDI 11475!\" MW \"ISM 3mm SEEM HEM \"SIDS HIRE-'5 HEM \"SIDE m Exhibit 1 HISTORICAL TRADING PERFORMANCE {January 5, 29911 March 28, 2007] Somme: Bfuambery nl: Tbh; lngers 5&Psl: Rogers 123.7% ESPNSK 52.5% Talus 514% BCE 3.3% \fExhibit 3 SUMMARY DF CANADIAN TELECDM CDMPARABLES {A5 of March 23th, 2952'] Su mrnarf of Canadian Te lemm Comparables As of 33'251'2002 Ma rket Enterprise Price Cap Value PIE EW'E BITDA CumEEInI 1123! FE \"lion! !E$ \"lion! IIIITE I'D-DEE I'D-DTE 111111115 BEE 35.13 24,333 32,355 14.31: 14.01: 5.41: 5.311 Rogers 35.95 23,912 35,154 35.21: 23.01: 9.21: 3.411 Telus 52.5}' 15,953 25,511 E 15.31: m E Mean 22.3): 19.111 2.111 5.51 Median 12.211 15.311 5.511 5.111 Somoe: Equity 5351111111211. 5142006 Camden Teieoom Ber-1151:1515 Review. Gddmari Sachs, Febnmnr 2012?. Exhibit 4 BEE Inc.: Summary of Unleveraged Free Cash FI-t11111r [i 1 2 3 4 5 'I'EIr M m 21:15: 21111:: ELIE HIDE Total Revenue 14,159 15,1111 15,411 15,141 11311115 15,356 EBIT 3,2515 3.142 3,4111 3,455 3,511 To: Rate H.095 15.055 15.095 3.095 5.095 LESS: Till [490} {5011 i510! 1351'} [333} After-Tax EBIT 2,1115 2,3411 1,3111 2,6111 2,5511 Plus: Depreciation 2,50 2,630- 2,5'1"5 2,225 2,231 LESS: G'I-PE' [215451' ilmi {1155i [213133] [213511 Change in Working Capital 1141 l 141 I11: [12h [Qt Told Unlewm Free Cull Flow 2,585 2,219 1,!!! 2,511? 2,555 Exhibit 5 BEE INC; KEY LBI'JI ASSUHP'I'IDNS Milne: Keylllssuwms Aisle-nil the ' ' feta" an 3 andexitan 1 2312' lei-Transihn Mum Source of Fund: Unaffected deirg Pride [WWI]?! 50.13 medsfram #5555915 Acquisition pmmium Telesat" 135D Talieuut Prime SE15 Market Va lue Elf Bell Aliant stake\" 2,65! Basil: Shares uislandings D'i WWW] 3:115 Cngubernedia IEI II] Plus: ErC'E Dpunsulstandi ngl[as ufilf} Ell-.2 Dtherhssels I31 53] FullyI Diluted Share5 Dutstanding 331.8 Tulid Pmmeds nmAeset HE em Less: Dptiun Pmeds'\" {emu} Pmmlemairing tube nna-nad 31,93: emltwalm H.115 mint Add: NetDebt 1 Preferred Share: 1! lullim'alr'itllI Interest Senior Debt @ 3.01 LTM EBITDA 16.511 Debt In: Hell lial-IE Telesa'tl "' 9,555 Subm'dinated Debt 9 1m LTM EBITDA 11,059 BEE Preferred Shares\" 1,595. THE Debt 11,513 Mi naritylnu: rest 11m Equity 1315 Eirrpre'dm 1.1.15 Tali Saute ltd Finds $1,335 m LTM EBITDA 5,535- E'U' f LTM EBITDIIL 15: EU LTM EBITEM ulti' usbed 6.3x Serumsm Wammmmmmmemmmm Lil'fnaevalerdhjdePapa-ylme, TDMeuueetBGE-rel \"Mdmmafamtmngewm Fakeaenfuayam Emma-1AM, REC Gafafa'kefeBGEm, mmm.'m, 300?. ireg-Haeonald, ardeiereuahe' Nau-nal'anknandai. HGEh-m., Ttha mews-$4036.??? Amiga, 3M1 4.6m Ganpbearu'nisu, \"31-11!me SEEM, 'HGEMautre arMSnmkei'pri 11'; 2:157. Hull: 1 Band mau'elrtedlmageeeenisepr'eenflolWJLl 1 Includes hum debt inrl-CElneanud Bellanach dll'lslurl: only. 3- Rednel'nptlnn nine val [I'lfll'l'ld hm uIiIIneid [m Ihe Weren't Pruner Clrml-L 4 Hetpuceuknbtalredmtl-niea'iTele-. 5- &1er: Ill-I- mllllnrei unlll. n'f lell Nian'l: Ihe rrurhe'l: line nl'll'hlnh Inc: $3.52 per Lain-1 SEW. hurries I 111% huldlr' m demur. In EI'U'gInIlrIu-dll I: I pill-null; held temp-w. [mime-be: alwlue are based on unlit-ll reels-eh. tenure-u: estimates. 1' Includes ''Ie shines held In publicly 'Indld noun-dc: Cleamdlle Corp and Shfl'em. BEE held 119 mllllunIaruln-el'line lhldiduediilm yfl'hled an enmelm rle elm an: I'm. BII held 215 rI1IIIInn dun-LI. In Elk-[Tern which: closed atm Slim Imed an In want \"I\" rt of US$15 urn rm. Exhibit 6 BEE INC; SU IIIIIEAR'I" LB'GII ASSUMPTIONS 51:211.; mama Immm m1" mar m n- u: m 1115 an: mm m 1.1.31.1 1.1.1111 1.5.1.: 1.1.111 5.111 1:11: 15.11; 1111-11-11 11311 1511 2111 2.11: 1.11: 1.111 1.111: hm: mun-m1:- H.145! 15.2511 15131-1: cum [9.1a 5.55} Ilmr [mu-E] 11qu an an; an 51.1! 51.111 1111: 51.111 M mum 1.11.1: m 1.515 an 5,911 am 11111 1.111 'lm 35.111: 3531; 1251: 1115: its: in: an: m Ins: our-mum 11.3151 11.1131 11.511: 12.51:: [2.1m 1.1.5151 Izmi- ll?!\" sum 115111 111.11; 1:115 11m 12m 12m 13.131; 1:111; Eur 1.111 rm 3.1111 1.15 1.31: m 3.3 1:11 lm m 5.21; 2:51: 21.51: 2151: 151: 11.31 21.11: mm [M [1.5111 [1.11611 ILT-'- Ital] an 1.15: 1.1111 1.511 1.311 1.1m Ins.- III ll Ill-III IE} 1111'] DEL] uwmmm 15.91: 1.11111: 1.5131: 1513: 3.111: mum w 1.191 1.3111 1.13 m are": mar Hum Hm. mnmm W m n all m 11:15 11111: HItlnmml- 1.1151 1.11:: 1.3111 1.113 1.! Hus: DIprIdIm 2.51: 2.31 155 1.7211 1.1: li! {hp-x [2.55: [2.11111 [1.51 IIHIH ILHJ tag-Mm 11a 1151: 1:51: 1:11; 1131: Walnut\": 11:1 [1-11 [1.11 [1.11 11.11 1:51 mm 1m: 4m 4m .1131 .1111: 1111: Hu- an mmulnrnm ml! m 1.11! 1.1111 1.135 1.3 mmmmm 531 am in 13 ga- 3cm; mm m n- 11: 11111: 111115 11111: mm-mm-n Muir's-mu 15.511 15.3: 11-.5a1 13.3.1.1 1.1.13 nus: mmm In: [Ly [1.1311I \".1351- Im madam!- mm-I 15.131 11.5a1 13.311 1.1135 mm mm 1,131 use 511 131 11:11 W 11-11: - mun w:- | n: mum 11.1111 11.1159 11.1151 1.1.1119 11.11111 Luna-111mm . . . . madam!- 1.1.1111 11.1191 11.111111 11.11111 1.1.1119 11.11119 mm 1115 use an; as. as nun-u 11.53 m Liam 11.311 311:. 21.11: 11m 3.1.1: 151: 11.51: 11511; M 11111; Emu-alum H'E mm m n- 11: 11111: 111115 111115 spawn: n 1 l a 1 5 mam-um- :In: "1.11 "m: 111: mu mum in: 5512 am 551 5.31.1 wuuauqlwmlmmm 111.2: 11.113 2.511 13.1.? \"1.15 It\": II'EDIII IE 125m IE [REEF [3111?] Bum-u 11.15: 15.113 11.151 mm 2.211 Mmhm-'n'w am 11,315. . . . . 11.213
