Canada's BCE Submits Revised $3.38 Billion Takeover of Astral Media for CRTC Approval

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Asset sales, new audience yardsticks and more homegrown content investment are promised as the phone giant looks to acquire the indie media group after an earlier rejection of the deal.

TORONTO – It’s round two between BCE and the CRTC, Canada’s TV watchdog, after the Canadian phone giant on Monday said it submitted a revised takeover deal for rival media group Astral Media.

Few details of the amended agreement between BCE and Astral were unveiled Monday.

But the new $50 per-share deal is close to the original $3.38 billion price tag for Astral Media as part of a merger transaction that the CRTC on October 18 rejected on grounds it would harm consumers and curb competition.

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As with the first failed deal, the Astral Media takeover must secure approval from the CRTC and the Competition Bureau.

The updated application includes a one-time $0.50 per-share cash dividend as a sweetener for Astral shareholders, who overwhelmingly approved the original takeover deal.

The new application also makes no mention of asset sales, but they are in the cards, according to sources close to the takeover deal, as BCE looks to ease CRTC concerns that it will seize too big a slice of the Canadian media market.

"We heard Canadians and the CRTC loud and clear — they want assurance that Astral joining with Bell Media will directly benefit consumers and creators," BCE president George Cope said in a statement Monday.

Specifically, BCE will be looking to comply with "relevant viewership thresholds” required for regulatory approval of the deal.

When rejecting the first deal, the CRTC said a Bell/Astral combo would control 42.7 percent of the English language market, which exceeds a 35 percent threshold allowed under regulatory rules.

BCE in the wake of the CRTC rejection countered that Bell and Astral combined would have an English-language TV market share of 33.5 percent, below the 35 percent threshold, and just 24.4 percent of the French-language TV market.

The phone giant has vastly changed its Canadian viewership yarkstick for a second go-round to secure CRTC approval.

The revised regulatory application is no longer asking the CRTC to include U.S. channels when measuring overall Canadian viewership, or joint ventures that Astral Media participates in.

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BCE has already spoken to potential buyers of Astral Media assets as it looks to reduce the footprint of a Bell/Astral entity.

The TV properties likely to be spun-off are mostly in English-speaking Canada as BCE looks to bolster its presence in Quebec’s French-speaking market, where Astral Media first laid down roots during its 50 years in operation.

The CRTC is expected to consider the revised application for the Astral Media takeover in early 2013, with a decision possibly coming next spring.