MONTREAL - The failure of Astral Media shareholders to endorse a special $25-million premium to company founder Ian Greenberg doesn't constitute a failure, chairman Andre Bureau said Thursday.
Shareholders overwhelmingly approved the $3.4-billion acquisition of the TV, radio and billboard company by telecommunications giant BCE Inc.
But inadequate support from shareholders prompted the company to withdraw a planned vote on the payment to Astral's president and CEO.
"Ian Greenberg negotiated on Astral's behalf an absolutely exceptional agreement with Bell (and) had the right to be rewarded in an exceptional way," Bureau said at a news conference after the meeting.
Voting intentions expressed in advance through proxies "told us that shareholders were not convinced that (the premium) was the right thing to do," he added.
"Shareholders sent a message to Greenberg that the transaction he completed didn't deserve a tip," added Michel Nadeau, director general of the Institute for Governance of Private and Public Organizations, which denounced terms of the deal.
Even without the extra payout, Greenberg and his family will receive more than $100 million for their Astral shares.
They will receive $54.83 for each Class B share, compared to $50 available for Class A shares held by the public. BCE is also paying $50 million to get their hands on 65,000 "special shares" held by the family at $769 a piece.
Nadeau said Class A shareholders could receive $2 more per share if the Greenberg family accepted the same price as other shareholders.
Astral (TSX:ACM.A) chief financial officer Robert Fortier noted that it's established practice for Class B and special shares to command a higher price than non-voting Class A shares.
At least two other companies joined BCE in submitting bids for Astral in recent months, but no auction was pursued in an attempt to boost the offer price. Still, the management said it believes Astral obtained the best possible price since no new offers were filed after the deal was announced on March 16.
BCE's purchase was approved Thursday by shareholders representing more than 99 per cent of Astral's Class A and Class B shares.
"We are very pleased that Astral shareholders have overwhelmingly decided to support Bell's acquisition, which brings together two of the strongest brands in Quebec," George Cope, president and CEO of BCE and Bell Canada said in a statement.
Bureau refused to disclose the percentage of shareholders who opposed the premium. He said the company was not obliged to submit the premium to a separate vote, but did so for reasons of transparency.
The Montreal investment firm Jarislowsky Fraser wrote to the Ontario Securities Commission of Ontario and the Radio-television and Telecommunications Commission (CRTC) to complain about the various extra money available to the Greenberg family as part of transaction.
The Caisse de depot et placement du Quebec said it voted for the transaction, but against the $25-million premium.
Greenberg refused to meet with the media, saying he had to participate in a conference call.
Asked at the news conference about the future headquarters of Astral in Montreal, Bureau said he could not predict the future but wasn't particularly worried about it. He said Cope has indicated that Astral's assets were "complementary" to those of the telecommunications giant.
"This is not just a business or operating licenses acquired by BCE, it's much more," insisted Bureau. "Bell is acquiring a talented, creative and dedicated team in Quebec and across Canada. "
But Nadeau said he believes a big part of Astral's management will be shifted to Toronto, where most of the executives are based. The Montreal-based Astral "will become a regional branch of French activities," he predicted.
Finally, the company wouldn't say how many Astral radio stations may have to be divested to meet conditions imposed by the CRTC.
Last month, Bureau suggested that BCE (TSX:BCE) could seek exemptions from the regulator to avoid having to divest the stations.
BCE expects the deal will be completed in the second half of the year after it receives regulator and court approvals. A hearing by the Quebec Superior Court is scheduled on Friday.
Astral operates radio stations, television channels and specialized outdoor advertising in Quebec and the rest of Canada.
On the Toronto Stock Exchange, Astral's A shares closed off three cents to $48.59 in Thursday trading. BCE shares were down 56 cents to $40.37.
Canada's 7 Media Giants
Postmedia - $1.1 Billion
Postmedia was born in 2010, when the bankrupt Canwest media chain was broken up. A consortium led by then-National Post CEO Paul Godfrey bought Canwest's newspaper assets, including the National Post, Ottawa Citizen and Calgary Herald, as well as both English-language dailies in Vancouver.<br> <br> Pictured: Postmedia CEO Paul Godfrey<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Torstar - $1.48 Billion
Torstar's flagship property is the Toronto Star, Canada's largest newspaper. It also owns the Metroland chain of weeklies and the internationally popular Harlequin, publisher of pulp romances.<br> <br> Pictured: The Toronto Star building in downtown Toronto.<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Shaw - $4.74 Billion
Western Canadian cable TV giant Shaw entered the media big leagues with the 2010 purchase of Canwest's broadcasting assets, including the Global TV network. The company was founded by Jim Shaw and is still controlled by his family.<br> <br> Pictured: CEO Brad Shaw<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em><br> <br> <em>CORRECTION: An earlier version of this slide stated that Shaw had purchased Canwest's newspaper assets. It only purchased the broadcasting assets. The company had backed out of an earlier attempt to buy three CTV stations.</em>
Quebecor - $9.8 Billion
Founded by Pierre Peladeau and run by his son, Pierre-Karl Peladeau, Quebecor owns the Sun Media and Osprey newspaper chains, as well as cable provider Videotron, Quebec TV network TVA, and a number of publishing houses.<br> <br> Pictured: Pierre-Karl Peladeau<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Rogers - $12.1 Billion
Founded by Ted Rogers, Rogers Communications is a major player in cable TV and wireless services. The company controls Rogers Media, which operates 70 publications, 54 radio stations and a number of TV properties including CityTV and the Shopping Channel.<br> <br> Pictured: CEO Nadir Mohamed<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Woodbridge (Thomson Reuters) - $13.8B
Woodbridge is the holding company owned by the billionaire Thomson family. It controls 55 per cent of Thomson Reuters, one of the world's largest news services organizations. Woodbridge's revenue is not reported, but Thomson Reuters reported revenue of $13.8 billion in 2011.<br> <br> Pictured: The late Kenneth Thomson, company chairman, in Toronto in 2003.<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>
Bell Canada (BCE) - $18.1 Billion
BCE is one of Canada's largest corporations, and owns telephone, Internet and TV infrastructure. Its subsidary Bell Media purchased the CHUM group of radio stations in 2006, and Astral Media in 2012. The company also controls CTV, making it a dominant media player in Canada.<br> <br> <em>*Number denotes latest available revenue figure, for parent company</em>