Canada's BCE, Astral plan new takeover application
TORONTO/OTTAWA (Reuters) - Canada's BCE Inc and Astral Media Inc have decided to go ahead with a new, revised application for approval of their proposed combination after the first one was rejected, the country's broadcasting regulator said on Friday.
Earlier, Astral said it was in discussions with BCE, the parent of Bell Canada, over revisions to their agreement that would overcome regulatory opposition to their original.
Its statement came after a newspaper report saying the two sides had already worked out a fresh deal to submit to the regulator, the Canadian Radio-television and Telecommunications Commission.
The CRTC blocked BCE's C$3 billion ($3 billion) proposed takeover of Astral last month, saying it would give too much power to BCE - already the country's biggest telecoms company and owner of numerous TV and radio assets.
On Friday, a CRTC spokesman said its chairman, Jean-Pierre Blais, had invited BCE Chief Executive George Cope and his Astral counterpart, Ian Greenberg, to explain the rationale behind its rejection. During the meeting, the two executives signaled their intention to try again.
"During those meetings they both indicated they would file a (new) application," said the spokesman, Denis Carmel, stressing that there was no pre-approval granted.
Even so, the explanation provided by Blais suggested they would understand clearly where the original plan went afoul - and, by implication, the kinds of changes that they would need to make to gain approval.
"The timing and details of any such application have not yet been determined. The company will keep its investors informed of any significant developments in this respect," Astral said in its statement.
Astral's Toronto-listed shares were temporarily halted after the newspaper report in the Globe and Mail. When the halt was lifted, the stock shot up and closed 5.1 percent higher at C$44.40. BCE closed up 1.5 percent at C$41.99.
Astral shares had closed 16 percent lower at C$39.51 on October 19, the day after BCE received the CRTC decision. BCE asked the federal government to intervene but was told the cabinet could not overrule the regulator. BCE's offer was for C$50 a share.
BCE is seeking to buy Astral, its largest content provider, mainly to strengthen its position in the Francophone province of Quebec, where rival Quebecor Inc has a much bigger presence.
Quebecor, Rogers Communications and other rivals of BCE had said the original deal would have let it lock up more programming for its vast media platform and would have given it too much heft and pricing power.
In addition to winning approval of the CRTC, it would also have to pass muster with Canada's antitrust watchdog the Competition Bureau, which has yet to disclose its views on the deal.
Last month, BCE extended the closing date on the proposed deal to December 16. The two companies have the right to further postpone the outside date by an additional 30 days to Jan 15, 2013.
"There is no assurance that any transaction will occur or occur with the terms and conditions currently contemplated," said Astral.