Telus, Rogers shares rise amid BCE takeover buzz
TORONTO, April 17 (Reuters) - Shares in Telus Corp. (T.TO), Canada's No. 2 telephone company, moved higher early on Tuesday as investors bet the company could be taken private following news that rival BCE Inc. (BCE.TO) was holding privatization talks.
"If BCE gets taken out in private equity, what's to stop somebody from going after Telus?" said MacDougall, MacDougall & MacTier analyst Troy Crandall.
Telus shares rose C$2.44, or 4 percent, to C$65.09 on the Toronto Stock Exchange.
Telus, BCE's Bell Canada and Rogers Communications Inc. (RCIb.TO) are the three main players in the country's wireless and wireline telephone markets.
Rogers gained C$1.17, or 3 percent, to C$41.90, on the Toronto market.
Telus, Crandall said, could even make a more attractive target for private equity than BCE at its current price, despite a recent run-up in its stock.
"So there's still upside, even at these prices, for Telus," he said. "Meanwhile, for BCE, it's arguable that it's quite a bit over its net asset value."
BCE revealed earlier on Tuesday that it was in talks with three Canadian pension funds as well as Kohlberg Kravis Roberts & Co., the U.S. buyout firm, regarding a potential go-private bid.
There had also been speculation that BCE and Telus could merge eventually, though Crandall played down that possibility because of competitive concerns.
"I just can't see how the Canadian government would allow the wireless assets to be combined, when they're screaming for a fourth competitor," he said.
($1=$1.13 Canadian)
((Reporting by Wojtek Dabrowski, editing by Rob Wilson; E-mail: wojtek.dabrowski@reuters.com; Reuters Messaging: wojtek.dabrowski.reuters.com@reuters.net. Telephone: +1-416-941-8009)) Keywords: TELUS STOCK/
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