Telus announced Tuesday that it will not pursue a bid for Bell Canada parent BCE, shortening the list of contenders attempting to buy the country's largest telecom operator.

In a short statement, Telus announced that "it has elected not to submit an offer to acquire BCE as part of the strategic review process announced by BCE on April 17, 2007.

"The inadequacies of BCE's bid process did not make it possible for TELUS to submit an offer."

BCE set up a special committee in April to deal with any potential bids. The deadline for offers was 9 a.m. EDT on Tuesday.

Telus had previously proposed a merger as the only way to preserve Canadian public control of BCE.

"Some people were saying there would be a big regulatory hurdle for Telus to get over if it wanted to buy BCE -- that there would be so much concentration of ownership that it would never fly," BNN's Michael Kane said Tuesday. "However, this is not the only potential bidder who has cited inadequacies in the bid process.

"The timetable was so short that really they were just unable to put together a comprehensive bid," said Kane.

Toronto conglomerate Onex and the Quebec pension fund Caisse de depot have also reportedly dropped out of the running. Both have pulled out of a takeover group headed by the Canada Pension Plan Investment Board, reports The Globe and Mail.

The group also included American buyout firm Kohlberg Kravis Roberts & Co.

Still in the running are:

• BCE's largest shareholder, the Ontario Teachers' Pension Plan, who have grouped with U.S.-based Providence Equity Partners.
• New York private equity outfit Cerberus Capital with Richard Li's Pacific Century Group

The Globe reported Tuesday that both groups have made a bid.

Catalyst Asset Management Inc., a small Toronto financial firm, is also reportedly still in contention.

In order to meet Canada's foreign ownership restrictions, the American firms must have Canadian partners. The limitations prevent the non-Canadian firms from holding more than 47 per cent of BCE.

After Telus made its announcement, BCE stock dropped $1.32 to $39.40 on the TSX.

With files from The Canadian Press