Bell to acquire Astral for $3.38-billion

BCE Inc. has reached an agreement to buy Astral Media Inc. in a cash-and-stock deal worth $3.38-billion, making it one of the largest media deals in Canadian history.

BCE president and CEO George Cope said Friday the move is particularly important to make the company a media leader in Quebec.

“The coming together of Bell and Astral puts us now head-to-head with our competitors in the marketplace, be it Quebecor’s Videotron and CBC,” Cope said in a conference call with analysts.

“Astral has other significant national media assets both on the radio side and the TV side that will leverage our portfolio across Canada.”

Astral shares were up $12.05 or about 33 per cent at $48.30 in trading on the Toronto Stock Exchange, while BCE shares were down 26 cents at $39.80.

BCE, which owns the CTV television network, the former CHUM radio network and numerous specialty television channels through Bell Media, said the deal includes $380 million in debt.

“This fits perfectly with what we are trying to do,” Cope told a news conference in Montreal alongside Astral president and CEO Ian Greenberg, who will join BCE’s board of directors.

“We believe TV everywhere is absolutely where the market is going and so the consumer ends up with more choice.”
   
Bell will be paying $50 per share, representing a premium of 39 per cent, based on Astral’s closing price on the TSX.

BCE’s offer is valued at $50 per share for Astral’s non-voting shares, and $54.83 for the voting class. Shareholders of Astral would receive 75 per cent in cash and 25 per cent in stock.

Astral owns 84 radio stations across Canada — such as Virgin Radio, EZ Rock and Boom — including 29 in Quebec.

It also operates 22 television services — including 13 French-language channels — with premium offerings like Super Écran, The Movie Network and HBO Canada, and top specialty brands such as Canal Vie, Canal D, VRAK TV, MusiquePlus, Télétoon/Teletoon, Family and Disney Junior.

Bell would also acquire Astral’s more than 100 websites and digital media properties, as well as its advertising division, which operates billboards around the country.

This deal is is bigger that than the cash portion Bell paid for CTV.

The transaction will require approval from the Canadian Radio-television and Telecommunications Commission and the Competition Bureau before it’s completed. Cope said he believed the deal would be viewed positively by the regulators.

However, to meet regulatory rules, Bell may have to sell some radio stations in English Canada, but not in Quebec.

Astral employs around 2,800 people across Canada, with about half of the people located in Québec.

Cope said there would be some duplication as both are publicly traded companies that would be dealt with, but was not specific about any possible cuts.