Please wait...
A top federal official has confirmed that the Canadian government will not intervene on behalf of Bell Canada Enterprises (BCE) and its failed bid to buy Astral Media.
Industry minister Christian Paradis on Friday told reporters that Ottawa will not get involved in the surprise decision by the Canadian Radio-television & Telecommunications Commission (CRTC) that killed BCE’s proposed C$3.3bn (US$3.3bn) purchase of Astral.
“We respect what the CRTC said,” Paradis told reporters in Montreal. “The CRTC operates an arm’s length from the government,” he added. “They made their decision so I will no longer comment.”
BCE turned to the feds within hours of its takeover bid being rejected by the CRTC, alleging the ruling went against the regulator’s own policies and further claiming the Commission was biased in favour of the deal’s critics. BCE said the CRTC’s recent hearings on the deal were “tainted by behind-the-scenes lobbying.”
This second rejection in as many days means BCE must now turn to a federal court if it wishes to salvage its purchase of Astral.
Help from the government was from the outset seen by industry watchers as a long shot, in part because of this summer’s appointment by Prime Minister Stephen Harper of CRTC chairman Jean-Pierre Blais. The appointment was widely seen as an effort to align the regulator’s thinking with that of the government, in contrast to the mutual head-butting that marked prior administrations.
The ruling Conservative party also tends to emphasise consumer rights in its policies, which was a central issue as opposing sides argued over the deal.
As BCE struggles to regain its footing, there is speculation that cable distributor Cogeco or broadcaster/distributor Rogers Communications would move to buy Astral. Cogeco is believed to have placed a bid on Astral when it initially went up for sale earlier this year, only to be outspent by the deep-pocketed BCE.
Cogeco and Rogers are thought to be among the few companies that could afford Astral without being so big as to violate the CRTC’s limits on media concentration. The CRTC turned BCE away largely because, with Astral’s assets, it would have had a 42.7% market share in English Canada, well beyond the CRTC’s 35% limit.
Cogeco owns no TV channels, however. Toronto-based Rogers has a modest 8.7% share in English Canada and is known to be looking to extend its reach into eastern and French Canada. But speculation in the Canadian business press points towards Cogeco. “It almost falls into Cogeco’s lap, and they were interested,” Ron Mayers, a Montreal-based trader at Laurentian Bank, told The Globe & Mail.
The Montreal-based company was among those that formed a coalition to stop the Bell/Astral deal, warning consumers and regulators that it would hand too much power to BCE. A Cogeco representative said the company has no comment on the deal, the ruling or the possibility of any future deals.
