(Reuters) - 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 previous bid.
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 content provider.
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 programming.
"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 channels.
Rogers said during a recent conference call that it would consider bidding on "selective" Astral assets if they were available.
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 network.
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 December 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 February 1 to shareholders of record at the close of business January 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.
Reporting by Euan Rocha and Allison Martell; Editing by Gerald E. McCormick, John Wallace, Andrew Hay; and Peter Galloway