Just when you thought the leveraged buyout craze couldn't get any bigger, here comes the largest deal to date -- a $35.1 billion buyout offer for Canadian telco BCE (NYSE:BCE) from a consortium of private equity investors.

Over the weekend, BCE (parent of Bell Canada) agreed to be acquired by an investor group led by Teachers Private Capital (an arm of the Ontario Teachers Pension Plan Board), Providence Equity Partners, and Madison Dearborn Partners in an all-cash deal that would have the consortium paying $40.13 for each share its members don't already own.

In announcing the deal, BCE crowed that the offer represented a 40% premium from the price of the shares before discussions of a sale became public. At that kind of premium, you would think that even the most true-blue of American investors will belt out a rendition of "Oh, Canada."

But the offer values the company at 7.8 times its earnings before interest, taxes, depreciation and amortization (EBITDA) for the trailing 12 months, somewhat below the value of other recent deals. Regional service provider Alltel (NYSE:AT) had investors that included Goldman Sachs (NYSE:GS) offer 9.8 times Alltel's EBITDA to take control of the company. And AT&T (NYSE:T) just offered 10.9 times EBITDA for rural wireless carrier Dobson Communications (NASDAQ:DCEL) in a strategic deal.

The lower valuation reflects the fact that Bell Canada is a more diversified telecom company, offering wireless, wireline, and Internet services. Whereas Alltel and Dobson are essentially wireless pure plays, Bell Canada generates much of its cash flow from 8.64 million fixed phone lines and only counts 5.8 million wireless subscribers.

The potential for growth in Bell Canada was tantalizing enough to have several groups bidding, including competitor TELUS (NYSE:TU). With the relatively low valuation, the current deal may not stand either, with other bidders apparently open to making a hostile bid for BCE. However, a new bid will have to come in significantly higher, as the current deal includes a breakup penalty of $751 million if BCE takes another offer.

Shareholder and regulatory approvals still have to be worked through, so the deal is far from done. Add to this all the private equity funds competing for good places to park billions and you can't rule out this deal getting even bigger.

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Fool contributor Dave Mock believes he is currently valued below market price. He owns no shares of companies mentioned here. He is the author of The Qualcomm Equation. The Fool's disclosure policy only goes for one bid -- priceless.