Globe and Mail: New Bell-Astral Takeover Pact
One month after Canadians' voices were heard by decision-makers at the CRTC in shutting down Bell's takeover, the telecom giant is said to now be making a second attempt at their Astral Media power grab.
Owning more of our media spectrum will give Bell a chokehold over the content we consume and the delivery of daily communications. Speak out against Big Telecom's expansion of power at http://StopTheTakeover.ca/.
Article by Jacquie McNish and Simon Houpt
BCE Inc. and Astral Media Inc. are poised to announce a new takeover deal that seeks to overcome regulatory opposition with a plan to auction off a number of Astral's English broadcast assets.
People familiar with the talks said the terms of the transaction have largely been finalized and a deal could be announced as early as Friday.
Trading in Astral shares was halted minutes before markets opened Friday morning.
"There will be an Act Two here that will be workable," said one person familiar with the discussions.
The two Montreal media giants reignited discussions days after a planned $3-billion takeover of Astral by BCE was scuttled in mid-October by the Canadian Radio-television and Telecommunications Commission, according to sources. The CRTC objected to the proposed acquisition in part because it would have handed BCE control of more than 40 per cent of the country's English-language television viewership.
BCE angrily denounced the decision, calling the commission "impetuous and unreliable," and vowed to rescue the deal by any means necessary. But its first route – appealing to the federal cabinet – was met coolly in Ottawa, and it is unclear if proposed court action would have a reasonable chance of success.
The speed with which the two sides were able to resuscitate an agreement that many experts thought had been fatally wounded by the CRTC decision reflects BCE's determination to land a major media acquisition in Quebec. The deal, one of the largest in BCE's history, would finally give the Montreal-based company a fully national media presence.
BCE is one of a number of global telecommunications companies that are moving aggressively into the media sector to supplement dwindling revenues in traditional telephone and Internet businesses.
It is unclear which Astral assets are slated for the selling block under the new plan, but one source suggested the bulk of the properties will be English-language broadcast assets.
A source familiar with the deal said the company would likely conduct an auction to sell the various properties, but the sale would be contingent on CRTC approval. Any new deal would first need to be submitted to the commission, and would be subject to a full hearing and vetting process.
A spokesperson for Bell Media declined comment. An Astral representative could not be reached for comment.
The core challenge for BCE will be to satisfy the CRTC that the reshaped takeover plan will not give the company undue power in the television sector. The regulator's most recent annual report found that BCE's services accounted for 33.7 per cent of English-language viewing. Assets wholly owned by Astral have 6-per-cent viewing share, and assets that are jointly held with Corus Entertainment captured an additional 3 per cent of viewership, putting combined viewership for BCE and Astral at 42.7 per cent.
The commission's 2008 Diversity of Voices policy says acquisitions that placed more than 35 per cent of viewership in the control of any one company would be closely scrutinized because of the possibility of a substantial lessening of competition, and those that reached a 45 per cent threshold would be rejected out of hand. Read more »
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