UPDATE 1 -BCE deal gets green light from Quebec Court

(Add details, bondholders reaction)

TORONTO, March 7 (Reuters) - A Quebec court on Friday approved the C$34.8 billion buyout of BCE Inc (BCE.TO: Quote, Profile, Research, Stock Buzz) by a group of private-equity investors, clearing a key hurdle to close the deal.

"We are very pleased with the Superior Court's decisions. On every point of contention, the Court ruled in favour of BCE," said Martine Turcotte, Chief Legal Officer of BCE and Bell Canada in a statement.

The Court dismissed all claims asserted by some bondholders of Bell Canada who insist the deal is unfair.

BCE, Canada's biggest telecommunications company, is being bought out by a group led by the Ontario Teachers' Pension Plan that also includes U.S. private-equity groups Providence Equity Partners, Madison Dearborn Partners and Merrill Lynch Global Private Equity.

The buyout group has offered C$42.75 per share for BCE, but the stock has languished well below that price as investors fret the deal could be delayed, re-priced or scrapped altogether, given the recent turbulence in credit markets.

BCE's shares closed at C$35.80 on Friday at the Toronto Stock Exchange.

Aside from the Quebec court approval, the deal is also being scrutinized by Canada's top broadcasting watchdog, the Canadian Radio-television and Telecommunications Commission.

Among the CRTC's concerns is the proposed makeup of the board of directors at BCE once the buyout is complete, it has said. Those hearings have been postponed until March 11.