* Canadian broadcast regulator rejected first proposal
* BCE, Astral give no specifics on revised plan
* Say new plan would offer same terms to Astral shareholders
* Combination's English-language dominance worried regulator
Nov 19 BCE Inc, Canada's biggest
telecom company, is seeking regulatory approval for a revised
C$3 billion ($3 billion) plan to take over Astral Media Inc
after the country's broadcast regulator rejected its
Astral and BCE, the parent of Bell Canada, said on Monday
they have filed the revised application with the regulator, the
Canadian Radio-television and Telecommunications Commission
(CRTC), which last month blocked BCE's original bid for Astral.
Astral owns specialty television channels, radio stations,
and an outdoor advertising business, and is BCE's biggest
A deal for Astral would give BCE more direct control over
costs and boost its access to programming for its television and
wireless customers, particularly those in Quebec, where both
companies are based.
BCE and Astral gave no specifics on their revised proposal
except to say the amount payable to Astral shareholders would be
the same as under the original plan.
The companies said the revised proposal addresses the
regulator's concerns over the level of control that the initial
plan would have given BCE over Canadian media. The new plan
spells out the steps the companies would take to comply with
relevant viewership thresholds, they said.
The CRTC rejected the initial proposal, saying it feared the
deal would give BCE a stranglehold over English-language
"We heard Canadians and the CRTC loud and clear - they want
assurance that Astral joining with Bell Media will directly
benefit consumers and creators," said BCE Chief Executive George
Cope in a release.
BCE is already a major media player, operating numerous TV
and radio assets, including CTV, Canada's biggest private
broadcaster, which it acquired last year.
The CRTC found that the original Astral deal would give BCE
33.1 percent of viewership of French-language Canadian
television, and 42.7 percent on the English-language side. The
regulator's policy is to carefully examine any transaction that
yields a market share between 35 to 45 percent.
The CRTC will make details of the new proposal available
when it launches its public consultation process on the
application, the companies said.
Astral's shares rose 3.3 percent to C$45.86 on Monday
morning on the Toronto Stock Exchange. BCE shares were slightly
firmer at C$42.10.
If BCE sells off some of Astral's English-language assets to
satisfy regulatory concerns, a number of Canadian companies
could be interested in buying them.
"There's definite interest by Rogers," said Desjardins
Securities analyst Maher Yaghi, referring to Rogers
Communications Inc , one of BCE's largest competitors
in cable and wireless. "I would expect Corus or Shaw are
probably also interested parties."
Corus Entertainment Inc's assets include a number
of specialty channels geared towards children and women, and
music and talk radio stations in major Canadian markets.
Shaw Communications Inc, the dominant cable
provider in Western Canada, also operates the Global network, a
competitor to BCE's CTV, as well as a portfolio of specialty
Rogers said during a recent conference call that it would
consider bidding on "selective" Astral assets if they were
BCE's media deals are part of a global trend as the
popularity of tablet computers and smartphones blurs the lines
between telecom carriers, media and cable companies
"The idea is, owning these channels will allow them to offer
quicker access for consumers to channels that they like on a
mobile platform," Yaghi said. "Because you own the assets, you
can quickly move content."
Yaghi said he is not convinced that owning media assets can
help telecom companies win market share. But he still sees the
Astral deal as valuable for BCE because it could boost cash
flow, helping BCE build out its Internet protocol television
The companies extended the outside date for closing the
transaction to June 1, 2013, with both Astral and BCE having the
right to postpone to July 31, 2013. They extended the closing
date to Dec. 16 after the CRTC rejected the initial proposal.
Astral said its board declared a cash dividend of 50
Canadian cents a share on both its class A non-voting shares and
class B subordinate voting shares, payable Feb. 1 to
shareholders of record at the close of business Jan. 15.
BCE, which appealed to the federal government to intervene
after the CRTC blocked its initial application on Astral, said
it has withdrawn that request.