BCE brings back dividend

One day after the bid to privatize BCE Inc. by a group led by Ontario Teachers' Pension Plan ran aground, the telecommunications company reinstated its dividend and said it will buy back some of its shares.

BCE said Friday before the opening of stock market trading that it has declared a fourth-quarter dividend of 36.5 cents a share.

The company did not announce any plans to cover dividends that were missed in recent quarters after the payout was suspended.

BCE also said it will repurchase up to five per cent of its outstanding common shares, which works out to about 40 million common shares.

The $42.75-a-share cash offering for Bell Canada's parent corporation by a group led by the Ontario Teachers' Pension Plan suffered a fatal blow late in November when auditor KPMG determined that the company-to-be wouldn't pass a solvency test required as a condition of closing the deal.

The $52-billion takeover of BCE was officially declared dead early Thursday by the two sides.

However, BCE and its would-be buyers now appear headed for a legal fight over BCE's demands that the suitors pay a $1.2-billion breakup fee since the deal was not concluded. The bidders said the conditions of the takeover were not met, so they say neither side should have to pay.

BCE shares slipped 80 cents, or 3.6 per cent, to $21.23 on the TSX.