And what about the bigger picture?

You have to wonder about the partnership taking BCE Inc. private… don’t you think?

On the one side, you have the Ontario Teachers Pension Plan. Presumably a group that wants to hold BCE Inc and use the steady cash flow to immunize pension payments.

On the other, two private equity firms, that most likely want to re-structure the company with a public exit plan somewhere down the road.

Yet despite that, this partnership has held together and continues to press ahead with the privatization of one of Canada’s leading companies. And press they have, against a myriad of land mines, that seem to prop up with each new day.

The latest twist being a ruling from the Quebec Court of Appeal that sided with the BCE bondholders. Leading the market to speculate that the deal is dead. At least until the case gets heard by the Supreme Court of Canada. And that volley has analysts lined up on both sides of the table; split between those who think the deal will get done and those that don’t.

I talked about BCE Inc. in a previous blog and suggested that traders buy the shares and write the May 40 calls against the stock. That trade worked well, leaving traders with a cost base about where the shares are currently trading.

You would also have had an opportunity to write June 40 calls between 85 cents and $1.10 shortly after the May options expired. Before, of course, the latest set back to the merger. If you were able to sell the June calls before the sell-off, you are sitting with an excellent position; a cost base below $34 per share, which many believe is where the stock would settle if a deal did not get done.

Moreover, you may get another opportunity to write calls. Even if the deal does get done, it may not take place before the end of June. It almost certainly will not be decided before the June options expire.

That said, I like the prospects for BCE Inc. whether or not the deal gets done. If someone pushes the No Deal button, you still have a stock with solid earnings and most likely, a rock solid dividend. You might even get a special dividend or a dividend increase, considering the $1 billion break up fee that would go to BCE Inc. if the deal fails.

Beyond the day to day noise, this deal has implications that go beyond BCE shareholders and bondholders. The success or failure of this deal gives us a mirror into the credit crisis. Because this deal should get financing because the dealmakers have the wherewithal to support the new found debt.

And while this is not exactly the borrower the US Federal Reserve was attempting to support when it added liquidity to the system, it does on a larger scale, speak to the willingness of banks to provide financing to creditworthy customers.

If the banks that are behind this deal, use the latest hiccup as a reason to back out, then it tells us that we are still early in the credit crunch game. Which is to say, more angst to come.

If the banks stand steadfastly behind the deal, and the Supreme Court overturns the Quebec court ruling, then this deal gets done. If so, it tells us that we are at the credit crunch end game, which would be very good for the broader stock market, and more specifically, the Canadian banks.

If nothing else, it makes for great entertainment.