UPDATE: Bell Canada's leadership was "dumbfounded" and "outraged" at the CRTC's decision to block the company's takeover of Astral Media, Bell CEO George Cope told the Globe and Mail Friday.

Cope said Bell had worked with lawyers to ensure the structure of the deal would fit within the CRTC's guidelines on market share, only to see the telecom regulator reject the merger on market share grounds.

“The concept that we wouldn’t understand the definition of market share is absurd. It’s just absurd,” Cope said.

Bell owns a minority stake in the Globe and Mail.

MONTREAL — The federal government won't get involved in the CRTC decision to block Bell's friendly takeover of Astral Media, Industry Minister Christian Paradis said Friday.

The minister said the CRTC is an independent commission that makes its own decisions.

'The CRTC operates on an arm's length from the government,'' Paradis said at an event at the Canadian Space Agency, south of Montreal.

"I understand that they held hearings and they made their decision so at that point I will no longer comment since the decision is still there.

"Bell, I don't know what they will do, but the decision was clear in terms of a conclusion and we do respect what the CRTC said on this regard.''

BCE Inc. has said it will call on the federal cabinet to intervene, but a CRTC spokesperson has said a challenge would have to go to the Federal Court of Appeals rather than to the government.

The surprise decision by the CRTC was announced after stock markets closed Thursday and marked the first major ruling for newly installed commissioner Jean-Pierre Blais, who took over in late June.

Astral Media Inc. shares tumbled 15.5 per cent in response to the decision that blocked the $3.4-billion takeover of the radio, television and billboard company by BCE Inc.

Astral's class A shares fell $7.29 to $39.71 in early afternoon trading on the Toronto Stock Exchange. The shares had been trading at about $36.25 before the deal was announced on March 16, but immediately shot up after Bell was set to pay $50 per share for Astral's class A non-voting shares and $54.83 for the company's class B subordinate voting shares.

Astral stock remained above $49 for months, but weakened after opposition to the deal intensified in August and investors began to speculate regulators would require changes to appease concerns about concentration of media ownership and the impact on BCE's rivals.

For the most part, however, industry watchers had expected the deal go through with some modifications but it was rejected outright on Thursday by the CRTC.

BCE Inc. shares were down 73 cents to $42.90.

The decision marked the first major ruling for newly installed commissioner Jean-Pierre Blais, who took over in late June.

"Simply put this was not a good deal for Canadians'' that could have restricted choice and raised prices of services, he said Thursday.

Blais said had the regulator allowed the deal, BCE would have controlled almost 45 per cent of the English TV viewership and almost 35 per cent of the French. As well, it would have become the largest radio station operator in Canada and would have controlled over half of TV pay and specialty services.

"At the end of the day, BCE demonstrated clearly that the proposed transaction would be good for BCE, but we were not persuaded that it was in the best interest of Canadians,'' he said.

Scotiabank telecom analyst Jeff Fan said without Astral, BCE's dividend growth strategy could be threatened because Astral's cash flow would have been an important source of funding it.

"The No. 1 reason this is negative for BCE is that we believe its dividend growth strategy is now compromised without Astral,'' Fan wrote in a research note.

Fan also said Astral should still be in play, but the rules are now unclear as to who can buy it.

"Rogers is likely interested in some of the assets, but may not be allowed to buy all of Astral,'' Fan said in a research note.

"There has also been speculation that Cogeco and Corus could partner to acquire Astral. But Cogeco just made its bet in the U.S. with Atlantic Broadband. And like Rogers, with Corus being considered under the Shaw umbrella, it may not be able to pursue this, as it will likely be considered another vertical transaction by Shaw,'' Fan said.

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  • 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>


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  • 10. Open Text Corp.

    Brand value: $624 million Photo: Tom Jenkins, CEO of Open Text Corporation (The Canadian Press) Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 9. Cogeco

    Brand value: $790 million Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 8. Bell Aliant

    Brand value: $1.015 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 7. CGI Group

    Brand value: $1.301 billion Photo: CGI Group founder and chairman Serge Godin, left, and chief executive Michael Roach (The Canadian Press) Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 6. Quebecor

    Brand value: $1.753 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 5. Telus

    Brand value: $3.019 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 4. Shaw

    Brand value: $3.191 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 3. BlackBerry (RIM)

    Brand value: $3.293 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 2. Rogers

    Brand value: $4.087 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>

  • 1. Bell

    Brand value: $5.258 billion Source: <a href="http://www.brandfinance.com/offices/canada" target="_hplink">Brand Finance Canada</a>