BUSINESS

Bell Astral Media Deal: BCE Purchases Media Company For $3.38 Billion (UPDATE)

03/16/2012 12:50 EDT | Updated 03/16/2012 12:50 EDT
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UPDATE, Friday, 7:38 a.m.:

BCE has confirmed it is buying Astral Media for $3.38-billion in a deal that would give the Montreal telecom giant's media arm a network of TV and radio assets, as first reported by Le Huffington Post Quebec.

BCE said its Bell Media unit would get a big foothold in the Quebec market, and says the deal "directly supports Bell's strategy of investment and innovation in broadband networks and content."

But the move also raises regulatory concerns about a concentrated media market. Under the deal, Bell Media's asstes would include seven radio stations in Vancouver, six in Toronto and six in Ottawa. Past deals have seen broadcasters have to sell off some assets to ease concerns about competition.

The deal, subject to regulatory approval, includes a $150-million breakup fee in case the deal does not go through with the Canadian Radio-television Telecommunications Commission.

BCE is offering $50 a share for Astral, a 39-per-cent premium on Astral's shares, which closed at $36.25 at the end of the trading day. Its market capitalization was at $2 billion at the end of the Thursday.

News of the deal sent Astral stock soaring. At 9:53 a.m. ET, its shares were up 33 per cent to $48.30. BCE shares were down slightly.

The deal, subject to regulatory approval, includes a $150-million breakup fee in case the deal does not go through with the Canadian Radio-television Telecommunications Commission.

"Bringing together two respected and longstanding Montréal brands, Bell's acquisition of Astral firmly establishes our company as Québec's media leader," BCE's CEO George Cope said in a statement.

"Bell is gaining a well-seasoned national Astral management team, dramatically expanding our French-language content, and more than levelling the playing field with our largest broadcast media competitor in Québec.

Astral owns 84 radio stations in 50 markets across Canada, including 29 in Quebec. The company also operates 24 pay-per-view and specialty television stations, including MusiquePlus, Musimax, Super Écran and Ciné Po.

"This transaction with Bell represents an exciting moment in the history of Astral, and an excellent opportunity for our company, our shareholders and our employees. We have come to know Bell very well as a long-time commercial partner, and the fit between our two companies is a natural," said Ian Greenberg, President and CEO of Astra Media.

The Greenberg family owns 68 per cent of the company.

The two companies are making a joint announcement at 9:45 a.m.

The deal would once again shake up the broadcast industry, which went through consolidation in the late 2000s. In 2006, Bell purchased the TV and radio assets of CHUM Ltd. for $1.7 billion. Bell ended up selling the City-TV stations to Rogers. Shaw purchased the TV assets of CanWest after that company went through restructuring.

ORIGINAL STORY FOLLOWS BELOW

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ORIGINAL STORY

Bell Media is poised to acquire Astral Media Ltd., Le Huffington Post Quebec has learned.

The announcement could come as early as Friday, sources tell HuffPost Quebec.

The move would allow Bell Media, a unit of BCE Inc., to bolster its footing across the country, notably in Quebec.

Astral owns 84 radio stations in 50 markets across Canada, including 29 in Quebec. The company also operates 24 pay-per-view and specialty television stations, including MusiquePlus, Musimax, Super Écran and Ciné Po. The company has a $2-billion market capitalization after its shares closed at $36.25 Thursday.

For its part, Bell Media owns the CTV network and its 27 affiliate stations across the country. The company also boasts a financial interest in 30 specialty channels, including TSN and RDS, along with a 15-per-cent stake in The Globe and Mail .

Together, the two companies own 118 radio stations and 54 cable channels.

For years, Bell Media has sought programming and content to drive its platforms and increase penetration into Canadian markets. Acquiring Astral would be in line with the convergence strategy that started with the purchase of CTV in 2000.

Reached Thursday night, Bell spokesperson Mark Langton only said: "We do not comment on rumours and speculation." On the Astral Media side, it has not returned any of HuffPost Québec’s calls or emails.

THIS IS A DEVELOPING STORY. CHECK BACK FOR UPDATES.