Canadian telecom BCE, suitor agree on terms

The announcement ends suspense that the banks funding the biggest buyout to date in Canada would try to back out of the deal or that the price would have to be lowered.

The acquisition price remains at 42.75 Canadian dollars ($42.08) per share in cash.

Citigroup, Deutsche Bank, Royal Bank of Scotland and Toronto-Dominion Bank are slated to provide billions in financing to complete the deal. Including assumed debt, the transaction is worth $51 billion.

The acquisition by Teachers Private Capital, joined by U.S. investment firms Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch Global Private Equity, will close "on or before Dec. 11," BCE said in a statement

Shares in BCE, also known as Bell Canada, moved more than 13 percent higher to 39.81 Canadian dollars after the announcement in trading in Toronto.

Shares traded well below the purchase price for several months as investors worried the banks might backout or that it might be reduced in price.

"The final agreement, with definitive financing now in place, preserves the 42.75 Canadian dollars per common share price announced last June, which the board believes is very much in the best interest of shareholders, the company and Bell Canada, particularly given current capital market conditions," BCE chairman Richard Currie said in a statement.

Shareholders overwhelmingly approved the buyout group's offer in September. Agreeing to final terms with the banks means shareholders won't have to vote again.

The deal was struck in June 2007, just before credit markets began to unravel in North America. Banks have been forced to write down billions of dollars on loans since last summer.