Bell Canada (NYSE: BCE) has added another piece to its media services suite by reaching a deal to acquire Montréal-based Astral Media Inc. (Toronto: ACM-A.TO).
Under the terms of the CAD 3.38 billion (USD 3.41 billion) deal, the service provider will acquire Astral's broad national media portfolio which includes top-tier TV, radio, digital and out-of-home properties.
The service provider will fund the purchase with a combination of cash, or about 75 percent of the equity purchase price and BCE common equity, with Bell retaining the right to replace shares with cash, in whole or in part, when it closes.
Shares in Bell Canada were down 6 cents at midday on the NYSE at $40.32 and were down approximately 10 cents on the Toronto exchange at $39.96. Astral Media's shares jumped 34 percent by midday to $48.55 on the Toronto exchange.
A key point of the deal is the ability to get more more content it can deliver over its emerging wireline-based Fiber to the Home (FTTH) and wireless-based LTE networks.
"Astral's strong financial position enables Bell to further accelerate our significant investment in broadband innovation across Québec, such as our launch this month of ultra high speed Fibe service directly to homes and businesses across Québec City and our rollout of next-generation mobile LTE," said George Cope, President and CEO of BCE Inc. and Bell Canada, in a statement. "With our advanced networks and next-generation Mobile TV and Fibe TV services, Bell looks forward to delivering Astral's unbeatable content to customers in new and innovative ways."
Astral brings multiple assets to the table: 22 television services, 84 radio stations in 50 markets, over 100 websites and digital media properties, and 9,500 out-of-home advertising signage locations in Québec, Ontario and British Columbia.
Of course, Astral is not the telco's first large media acquisition. In 2010, the service provider shelled out $2.9 billion to buy Canada's largest private broadcaster, CTV.
For more:
- see the release
Related articles:
Bell Canada lights up FTTH service in Quebec City
Videotron tries to one-up Bell Canada with 200 Mbps service; ACG, Infinera touts flexible modulation
Bell Canada Q4 earnings jump to $486M despite slipping wireline revenue
CRTC appoints Bell Canada, Rogers veteran Leonard Katz as interim chairman
Bell Canada ups dividend by 5% for 2012