David Cockfield Bell Aliant BA-T BUY ON WEAKNESS Jul 19, 2013

Stock vs. Stock: MBT-T vs. BA-T. Both have their challenges. BA: very good management. Almost through rolling out fiber to the home. Decent dividend. High payout and no wireless exposure. BA has more catalysts. Payout ratio will come down when fiber to the home is complete. Maybe someday BCE will buy them out.

Thinks it is a decent buy. Management reiterated in Q1 the commitment to the dividend. Good fiber penetration. Potentially a fit for BCE-T next year and it could be accretive for them to buy. Bell will have the cash next year and BA’s costs should be lower next year.

Wait for the takeover to complete before selling. Being acquired allows BCE to increase their dividend.

Bell Canada (BCE-T) taking over was a long time coming. Everybody knew this was coming. Makes sense for Bell Canada to start selling digital bundles, etc to other consumers. He is a huge believer in the telcos and the cable companies. If you own, he would recommend you roll over into Bell stocks.

Deal should complete in 6-8 months. There is a big long process that has to happen. BA-T holders should accept the deal.

Why is this selling below the bid price? He did some quick calculations when the bid came out and sold at a price over $31. The reason for this is that they have cut out the dividend. You are going to wait to November, and at that point in time you are going to get $31, so you have to discount that (The no dividend aspect?) Or you are going to get some mix of Bell stocks. In the meantime, the stock is going to trade off the Bell component. The stock is not going to do much. He would probably just sit with this.

Whether you take cash, Bell Canada (BCE-T) stock, or a combination, it depends on your tax situation. If you are in a taxable account, you pay a capital gains tax. If you take the stock, there is no tax. You should really consult with your tax advisor.

You are going to get a fair price on this as Bell Canada (BCE-T) has to treat all shareholders the same. Sold his holdings a day after the deal was announced. There is a whole tax situation that you are going to have to look at on your own.

Will trade off BCE until the deal closes. You could sell it here if you don’t want to end up with the BCE shares.

(A Top Pick Oct 22/13. Up 19.25%.) Being acquired by Bell Canada (BCE-T). He sold his holdings at $31.20.