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.