Bell to acquire Astral Media for $3.38 billion
Published Friday, March 16, 2012 4:02PM EDT
BCE's planned acquisition of Montreal-based Astral Media for $3.38 billion creates an "unmatched competitor" in the Canadian marketplace that will benefit consumers, BCE's president and CEO says.
"This fits perfectly with what we are trying to do," said George Cope at a press conference Friday alongside Astral president and CEO Ian Greenberg, who will join BCE's board of directors.
Cope said bringing Astral and Bell Canada together puts the company in an ideal position to take on Quebecor and its subsidiary Videotron in Quebec, as well as the CBC.
It also moves forward BCE's strategy of providing a wide range of services to customers across a "four-screen" platform - television, mobile phones, computers and tablets.
"The customer wins, no doubt about it, more choice in the marketplace across this four-screen evolution and in a way, also drives the Canadian broadcast business and puts it in a stronger position in the headwinds we see in this space going forward and the opportunities we see," Cope said.
Astral operates 22 television services that include The Movie Network and HBO Canada, and top specialty brands such as Canal Vie, MusiquePlus, Teletoon, Family and Disney Junior.
It also operates 84 radio stations in 50 markets, including NRJ, Virgin Radio, Rouge fm, EZ Rock and boom, as well as more than 100 websites and digital media properties.
BCE, the country's largest telecommunications company, already owns Bell Media, which includes the CTV network, BNN and other specialty channels.
The company also teamed up last year with its major competitor Rogers Communications on a $1.07-billion deal for Maple Leaf Sports & Entertainment, which owns the Toronto Maple Leafs, the NBA's Raptors and the Toronto FC soccer club.
Greenberg said Astral's assets as Canada's largest pay and specialty TV broadcaster will be an important component for the growth of Bell in the future.
"I believe that Bell is the best home for Astral and I certainly foresee an exciting future for all of us," Greenberg said.
"After 15 years as commercial partners, we know each other well and share many important values," he said. "The fit between our two companies is a natural and I look forward to seeing our brands become even stronger as part of the Bell family."
"It's a deal that really redraws the Canadian landscape in terms of television and radio services," BNN's Paul Bagnell said in an interview with CTV's Canada AM.
"Astral Media is a major player in Canadian specialty (channels) and pay television and radio as well, particularly in the Montreal market," he said.
However, critics say the acquisition raises concerns about the growing concentration of media holdings in Canada.
"I would like to see more diversity … so that Canadians have more diversity of voices, cultural and political discourse, online and in broadcast," said Lindsey Pinto of OpenMedia.ca, a non-profit organization advocating for open and affordable Internet.
News of the acquisition raised Astral shares by $12.05, or about 33 per cent, to $48.30 in trading on the Toronto Stock Exchange, while BCE shares were down 26 cents at $39.80.
Astral's advertising component includes 9,500 signage locations in Quebec, Ontario and British Columbia.
BCE's offer is valued at $50 per share for Astral's non-voting shares, and $54.83 for the voting class. Shareholders of Astral would receive 75 per cent in cash and 25 per cent in stock.
The transaction will require approval from the Canadian Radio-television and Telecommunications Commission and the Competition Bureau before it's completed.