Canuck phone giant BCE buys CTV network
Transaction will cost BCE around $3.2 billionTORONTO -- It's a carrier's world in Canadian broadcasting.
Just as cable giant Shaw Communications is set to acquire local network Canwest Global Communications Corp. for $2 billion, BCE Inc., the country's largest phone company, on Friday swooped in to acquire CTV, Canada's biggest and top-rated network as part of a friendly takeover deal.
Bell, which currently holds a 15% equity stake in CTV, proposes to pay $1.3 billion for the remaining 85% stake from The Woodbridge Company, the Ontario Teachers Pension Plan, and Torstar Corporation.
With an equity value of $1.5 billion, and $1.7 billion in debt, the entire transaction for CTV will cost BCE around $3.2 billion.
The Canadian deal awaits regulatory approval, as does the Shaw deal for Canwest Global.
BCE expects the deal to close by mid-2011.
"CTV is the most watched broadcast network for nine years. Clearly it is well positioned for the improvement of the Canadian economy," BCE CEO George Cope told analysts during a morning call to defend the transaction.
The phone giant has been here before. In 2000, BCE paid $2.3 billion at the height of the media convergence boom to acquire a controlling stake in CTV and the Globe and Mail Newspaper and formed CTVglobemedia.
But five years later, laden with debt and souring on the possibilities of cross-platform media promotion, BCE sold off huge chunks of CTVglobemedia to minority shareholders.
Now it wants back in as content carriers everywhere look for content to push down their triple-play TV, phone and Internet pipes.
Separately, Woodbridge, controlled by the Toronto Thomson family, will acquire the Global and Mail newspaper, with BCE retaining a 15% stake.
Ivan Fecan, CEO of CTV, who has been shedding CTVglobemedia assets in the last year to pay down debt, said it was time to sell out to BCE.
"Bell's acquisition of CTV underscores the strength of our No.1 conventional, specialty, digital and radio assets, and our leading creative and content management expertise," Fecan said.
"In today's digital age, it is extremely important to be part of a vertically integrated company that can take advantage of video delivered on multiple screens," he added.