June 5, 2012 / 8:24 PM / in 6 years

Canada's BCE confident of approval on Astral deal

TORONTO (Reuters) - BCE Inc (BCE.TO), Canada’s largest telecom company, is confident it will win regulatory approval for its proposed acquisition of Astral Media Inc ACMa.TO and said it sees plenty of interest in the radio stations it must offload as part of the deal.

President and Chief Executive of Bell Canada Enterprises (BCE) Inc George Cope looks on during the annual general shareholders meeting at the Congress Center in Quebec City May 3, 2012. REUTERS/Mathieu Belanger

The C$3 billion ($2.9 billion) deal is expected to draw close scrutiny from the Canadian Radio-television and Telecommunications Commission, given BCE’s heft since buying CTV, Canada’s largest private broadcaster, last year.

If the Astral acquisition would give the combined company more than 35 percent audience share, the regulator must decide whether the deal is in the public interest. It blocks deals that would give a 45 percent share in any region, genre or language.

“On the English side, we’re below the 35 (percent market share),” Mirko Bibic, BCE’s head of government and regulatory affairs, said on the sidelines of a telecom conference on Tuesday.

Broadly speaking, the Canadian market is divided between predominantly French-speaking Quebec, and the rest of the country, where English prevails.

“If you take all viewership, we’re below 35 (percent) and it’s all complimentary,” Bibic said. Astral has “children’s (programming) and we don’t have children’s; they have a movie network and we don’t have a movie network. Our services are ad-supported, most of theirs don’t have ads,” he said.

BCE, the parent of Bell Canada, has pushed aggressively to own the content it distributes over mobile phones, tablets and personal computers hooked up to its telecom networks.

The Astral acquisition would bring its largest content provider in-house and expand its presence in Quebec, where Quebecor Inc (QBRa.TO) is a major competitor.

Astral’s television portfolio includes the Movie Network and HBO Canada, as well as French-language Super Écran and Canal Vie, among more than 20 specialty cable and pay-TV channels. BCE’s Bell Media unit owns 29 specialty channels.


Montreal-based BCE has already said it would sell some of Astral’s radio stations after the purchase so that the combined company does not exceed the maximum number of stations a single company is allowed to own in a geographical market.

Some analysts have suggested Bell may struggle to sell the assets as rivals already own the maximum number of stations allowed, but Bibic dismissed that idea.

“There’s great interest. People are interested in buying them,” he said, without elaborating.

Len Katz, the acting chairman of the CRTC, said he had not yet seen the BCE/Astral file but a hearing would likely take place in late summer or early autumn, with a decision coming 35 days after the formal end of that process.

“In some cases they may be in that gray area, I’m not sure they’re in that gray area for everything,” he said.

The deal has already be approved by shareholders of both companies.


Bell’s Bibic said the company is in front of the CRTC on the related issue of how much it charges rivals to distribute its content on their cable or satellite platforms.

Content contracts came up for renewal at the end of 2010, with sport channels in particular seeing major rate increases.

Bibic said Bell has renegotiated with 159 distributors on a uniform per-subscriber rate structure but several, including Telus Corp (T.TO), Manitoba Telecom Services Inc MBT.TO and Cogeco Cable (CCA.TO) had balked at the terms it offered.

Bell and the distributors will make final pricing offers to the regulator later this week. The CRTC will then choose one of the rate plans to implement, in what is known as “baseball negotiations” designed to encourage moderation.

Editing by Frank McGurty

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