BCE currently owns a 31.6% stake in Montreal, Canada-based CGI, but uncertainty has clouded the future of the company since a BCE spokesperson said last year that it no longer considered CGI a core holding. BCE initially gained a 44% stake in the company in 1998, but as part of the deal it had the option that it could buy a controlling interest in CGI in January 2004.
As CGI spokesperson Eileen Murphy told us that this would have enabled BCE in a position to cash in on CGI by selling it to another major IT services provider such as EDS Corp or Cap Gemini Ernst & Young. But yesterday, the two companies said that they are now in discussions over a plan that will ensure that CGI’s current management team fronted by co-founder, chairman and CEO Serge Godin remain in place and BCE will no longer dispose of its CGI shares following the exercise of its call and put rights. According to Murphy, CGI contributes annual revenue in the region of CAD 400m ($258m) to BCE.
CGI’s majority shareholders have agreed to defer until April 15 the exercise date of the majority holders put rights as per an earlier agreement. Godin, along with co-founders Jean Brassard and Andre Imbeau collectively own 9.14% of CGI’s shares, but have more than 45.3% of the voting rights. Crucially, BCE also said that its existing outsourcing arrangements with CGI would remain unchanged. These include a seven-year deal it signed with BCE Teleglobe in March 2002 to run the company’s data processing infrastructure.
Source: Computerwire
