CGI Group buys and cancels shares held by BCE

CGI Group Inc. (TSX: GIB.SV.A; NYSE: GIB) and BCE Inc. (TSX, NYSE: BCE) have finalized a transaction previously announced on Dec. 16, 2005 in which CGI agreed to purchase for cancellation 100 million shares currently held by BCE at a price of $8.5923 per share.
CGI, which provides IT services to various business sectors, including the insurance industry, has financed the acquisition price of $859 million through cash on hand and utilization of its credit facilities.
CGI announced the disposition of BCE’s stake in CGI is one further result of BCE’s continuing review of its asset base.
“BCE has determined that it is no longer strategically essential for BCE to hold an investment in CGI given that the focus of Bell Canada, a wholly-owned subsidiary of BCE, is on providing network-centric managed services and applications,” CGI announced.
BCE and CGI have agreed that their ongoing relationship can be secured through their existing commercial agreements, which have been extended until the year 2016, CGI announced in a press release.
“The extension of these agreements reinforces the relationship between BCE and CGI, as it provides important sources of recurring revenue for both parties,” the release reads.
Following the expiration of a 120-day standstill period from the date hereof, BCE intends to dispose of its remaining 28 million CGI shares in an orderly fashion, CGI announced. BCE has no current intention to acquire additional securities of CGI.