Read My Lips - BCE DEAL IS GOING TO GO THROUGH!

Back in August, this site profiled BCE and the proposed leveraged buy-out by the Ontario Teacher’s Pension Fund - if it goes through it will be the largest LBO ever. The take-out price is set at $42.75 and the deal is now due to close in the 2nd quarter of this year. Back in August, BCE was trading around $39. The deal was thought to be pretty close to a sure thing.

With the recent market turmoil and investor anxiety, BCE has gone down further. BCE closed today, January 18 2008, at $36.37.

Well, the good news is that the Inspector still thinks this deal will close and recommends BCE as a buy.

Understand the risks – if the deal does not go through, the stock price will drop like a stone to around $24. However, even this worst-case scenario should be temporary, as BCE has assets many other suitors covet. In the unlikely event that the Ontario Teacher's Pension Plan deal does not go through, BCE would likely be able to garner other offers. This would be a very painful and bumpy road, but good to understand. The biggest stumbling block for the deal to close is banks coughing up the money for this leveraged buy-out. We all know about the credit squeeze taking place, and this is largely the reason why BCE is trading down. Investors are worried sick.

Well, as is often cited by the Inspector, other people's panic can be to your advantage. The panic bodes well for investors with strong stomachs. With BCE trading at $36 and change, there is an opportunity to make more than 15% in about 6 months. Nothing is certain in life except death and taxes (and even those are and have been challenged! Witness Wesley Snipes fighting the IRS and Dr Ron Paul running for the Republican nomination on a platform that includes abolishing the IRS! As for death, well, that’s still frozen in time, so to speak.)

In any case, the Inspector won’t promise you immorality or end taxes (though if you live in the US, you might do well to get behind Ron Paul and get the word out!). What the Inspector will do is provide you with sound investment advice. In a really nasty market such as the one we are in, BCE is a nice opportunity to make some cash.

DISCLOSURE: I own shares of BCE. Always do your homework.

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