Astral ‘still committed’ to deal with Bell, Greenberg says

Astral Media Inc. is still looking for ways to gain regulatory approval of BCE Inc.’s $3.38-billion proposal to buy the company, Ian Greenberg, Astral’s president and CEO, said Wednesday. “We are still committed to see if there’s a way to complete this transaction,” Greenberg said on a conference call with analysts following the release of the company’s fourth quarter and 2012 fiscal year financial results. “Until we get more colour going forward, that is our focus.” The CRTC rejected Bell's bid to acquire Astral on Oct. 18, citing concerns about the company's growing market power. Bell, in response, filed a request with the federal cabinet seeking a federal policy direction to the commission, under which Bell could submit a new application. Greenberg said the two companies have until Dec. 16 to complete the transaction. Either company can extend that deadline another 30 days to Jan. 15, if necessary. Astral said in a financial statement released Wednesday that the deal includes a stipulation that Bell must pay Astral a $150-million “break fee” if it does not go through for regulatory reasons. Astral would be required to pay Bell $100 million if the deal is rejected under “certain circumstances,” the document said. Astral spokesman Olivier Racette declined to provide further information about the break fees and under which circumstances Astral would be required to pay Bell. Industry Minister Christian Paradis told reporters at an Ottawa conference Tuesday that the federal cabinet does not intend to intervene on the file. “The CRTC is a quasi-judicial tribunal, so they make their own decisions, and at this point, there is an appeal possible according to the law, but we don’t have any intention to intervene,” he said following a speech at the conference, hosted by the International Institute of Communications conference. “The CRTC has its own jurisdiction. They tabled a decision, we acknowledged the decision. They did that within their jurisdiction so there’s no point for the government to intervene,” Paradis said. In Astral's financial statement, the company said it spent $12.8 million in costs related to Bell's proposed transaction as of Aug. 31, including $6.6 million in the fourth quarter. The week-long CRTC hearing into the transaction took place the week of Sept. 10. Astral reported profits of $54.3 million in the fourth quarter and $204.4 million in fiscal 2012, not including costs related to the Bell transaction, the impact of tax rate changes and the “impairment of broadcast licences.” It said fourth-quarter profits improved by 14 per cent over $47.7 million in the same period a year earlier, and annual profits grew 8.7 per cent from $188 million a year earlier. Astral said the “most significant variances” between its 2011 and 2012 numbers included $6.5 million in additional revenues from its advertising division and “higher subscription-related revenues” from pay and specialty TV services. Operating expenses also fell by $6.3 million, “mainly due to lower operating expenses in the Radio segment following the implementation of cost control initiatives” in late 2011, the company said. Astral said its specialty television subscriber revenues rose three per cent during the 2012 fiscal year, mainly due to the contribution of new Disney channels. Overall television revenues totalled $140.4 million during the fourth quarter and $586 million in the fiscal year. The company reported radio profits of $84.1 million during the fourth quarter, up from $82.2 million during the same period a year earlier. Annual radio profits declined to $336 million from $340.3 million in 2011. nkyonka@thewirereport.ca

Astral ‘still committed’ to deal with Bell, Greenberg says

News | 10/31/2012 8:45 pm EDT

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