Astral Media Inc. (ACM/A) said it is holding talks with BCE Inc. (BCE) to revive a plan sell itself to Canada’s largest telecommunications company after their proposal was blocked by regulators.
Astral is in discussions with BCE to continue pursuing regulatory approvals, including, among other options, the filing of an application with the Canadian Radio-television and Telecommunications Commission, according to a statement today. “The timing and details of any such application have not yet been determined,” the Montreal-based company said.
Canada’s broadcast regulator, known as the CRTC, rejected BCE’s C$3 billion ($3 billion) bid to buy Astral on Oct. 18, saying the deal would curb television and radio competition.
Astral, a broadcaster and owner of billboards, rose 5.1 percent to C$44.40 at the close in Toronto, its biggest single- day increase since the takeover was announced March 16. Trading was halted until noon following a report by the Globe and Mail on the renewed takeover plan. BCE rose 1.5 percent to C$41.99, its largest advance since Aug. 8.
“Astral appears motivated to press on with Plan A, albeit a likely materially modified version to appease a more prickly group at the CRTC,” Adam Shine, an analyst at National Bank Financial in Montreal, said in a note to clients published yesterday.
Both companies on Oct. 25 agreed to extend the so-called outside date, the deadline for the takeover to be completed, until Dec. 16. BCE and Astral each has the right to further postpone the deadline until Jan. 15.
BCE on March 16 agreed to pay C$50 a share for Astral, a 38 percent premium over the previous day’s closing price. That exceeded the 26 percent average premium paid by media companies globally in the last five years, according to data compiled by Bloomberg. Astral soared 34 percent on the day the transaction was announced.
Mark Langton, a spokesman for BCE, said today the company won’t be commenting on Astral’s statement.
BCE said last month it would request the federal government provide policy direction to the CRTC on how it reviews acquisitions. The regulator neglected to use its own policies when it blocked the Astral deal, BCE said in an Oct. 18 statement.
BCE, the owner of the CTV television network, lacked French content other than French sports channel RDS. Adding Astral would bolster that content, Vice Chairman Martine Turcotte said in March.
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