UPDATE 2-Astral could be sold piecemeal after BCE deal blocked

Fri Oct 19, 2012 4:23pm EDT
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* Astral stock drops after regulator blocks BCE bid

* BCE asks government to intervene

* Federal gov't says CRTC operates as an independent body (Adds details, background, updates share price moves)

By Euan Rocha

TORONTO, Oct 19 (Reuters) - Canada's Astral Media, owner of television, radio and outdoor-advertising assets, could be broken up and sold to several buyers, analysts said on Friday, after the country's broadcast regulator unexpectedly vetoed a takeover by BCE Inc.

Astral stock fell more than 15 percent in active afternoon trade of more than 4.5 million shares after the Canadian Radio-Television and Telecommunications Commission (CRTC) said on Thursday that the C$3 billion ($3 billion) deal would give too much market power to BCE, already Canada's biggest telecoms company and owner of numerous TV and radio assets.

The proposal, which faced fierce opposition from BCE competitors including Quebecor Inc and Rogers Communications, was not in the best interest of Canadians, the CRTC said.

"Our expectation is that Astral will undertake a strategic review given this decision and the desire of the controlling shareholders to sell the business," Scotiabank analyst Paul Steep said in a note to clients.

But the level of concentration that already exists within the Canadian cable and broadcasting arena, plus balance sheet concerns for some in the sector, have left most analysts doubting that a single buyer will emerge.   Continued...