Friday, 16 March 2012

BCE buys Astral in $3.38 billion media blockbuster

BCE buys Astral in $3.38 billion media blockbuster
By Josh Rubin Staff Reporter 2012/03/16 11:23:00

One of the largest media mergers in Canadian history gives BCE a bigger stake in popular specialty TV channels, as well as local TV and radio stations across the country after buying Montreal-based Astral Media in a cash and stock deal worth $3.38 billion. The deal gives the company a leg up in the Quebec marketplace, where it had previously lagged competitors, including Videotron and the CBC.

“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 (the Canadian Broadcast Company),” Bell CEO George Cope said in a conference call with analysts.
Related: Bell Canada buys Astral: The deal at a glance
“Astral’s strong financial position enables Bell to further accelerate our significant investment in broadband innovation across Quebec,” Cope added.
“The reason this makes sense for Bell is this gives them a larger competitive position in Quebec,” said Astral president and CEO Ian Greenberg, who will be joining BCE’s board of directors as a result of the deal.
The takeover would also make Bell the second-largest private employer in Quebec, with 20,000 employees in the province.
In a Montreal press conference, Cope dismissed suggestions that the deal concentrates too many media properties in Bell’s hands.
“It’s a yesterday concept that there’s any monopoly in any market any more,” said Cope.
A message from the Star seeking comment from the federal Competition Bureau wasn’t immediately returned.
BCE owns CTV, a national radio network and several specialty TV channels, including BNN and TSN. Astral owns 83 radio stations in 50 markets, as well as The Movie Network, Viewer’s Choice and HBO Canada.
“We think this will be viewed positively in the regulatory arena,” Cope insisted.
As far as restricting access to its formidable stable of specialty networks, Cope said that’s not what BCE is planning to do.
“We have every intention of this content being sold across the market,” Cope said.
While there were other potential suitors available, Greenberg said BCE was the best fit for Astral, from both a strategic and cultural point of view.
“I believe that Bell is the best choice for Astral,” said Greenberg, who acknowledged there was a bittersweet feeling, if not regret, that the company he and his three brothers founded in 1961 was giving up its independence.
“I can’t help feeling a touch nostalgic today,” said Greenberg.
For decades, Astral was best known for its national chain of photo-finishing stores, but over time the company grew into a multi-media powerhouse. When the first big wave of specialty pay TV channels took off across Canada in the early 1980s, Astral created First Choice, a channel devoted to showing movies. That network eventually transformed into The Movie Network.

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