Canada's BCE Turns to Feds to Salvage $3.38 Billion Astral Media Takeover
It's official: the phone giant has opted to throw the long ball after the CRTC rejected its blockbuster transaction on competition grounds.
TORONTO -- BCE made it official Friday.
Next week, the Canadian phone giant will hand the federal cabinet a formal request to help salvage its $3.38 billion takeover of indie broadcaster Astral Media.
BCE will ask the feds to lean on the CRTC to approve a transaction that the regulator rejected Thursday in a surprise decision.
That appeal portends an uphill climb for BCE after the federal government signaled Friday that it will not intervene in the regulatory process to overturn the CRTC decision.
"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," industry minister Christian Paradis said Friday when talking to the media at the Canadian Space Agency outside Montreal.
But BCE and its Bell Canada subsidiary appear undaunted as they look to reverse the CRTC decision.
"The Broadcasting Act explicitly empowers the cabinet to issue directions to the CRTC on broad policy matters," Mirko Bibic, Bell's chief legal and regulatory officer, said Friday in a statement.
"A commission that relies on a 35-year-old working paper to justify rejecting outright the Astral deal, rather than its own policy established in 2008, clearly needs guidance on the broadest of policy matters,” Bibic added, with an eye to drawing Ottawa into its corner.
The CRTC, Canada’s TV regulator, rejected the Astral Media takeover on competition grounds, going as far to say the deal was bad for Canadian consumers.
“At the end of the day, BCE demonstrated clearly that the proposed transaction was good for BCE, but we were not persuaded that it was in the best interest of Canadians,” CRTC chair Jean Pierre Blais said during a Friday press conference. “Our only option was to deny the application because it was not in the public interest. Simply put, this was not a good deal for Canadian."
BCE could make a separate appeal to the federal court of appeals, should its overture to the federal cabinet prove unsuccessful.
Failing that, Astral Media could well find itself back on the auction block, possibly to be sold off piecemeal to avoid further clashes with the CRTC on competition grounds.