Hi all. Steve and I are here to answer whatever questions you might have on the CRTC's refusal last night of Bell's attempt to acquire Astral.
Indeed, Lisa, as I just noted, it doesn't look as if Cabinet is going to touch this one. That's not entirely a surprise, since it has usually stayed out of matters unless there are issues of so-called national interest (Potash), or when decisions have appeared to be anti-consumer (Wind Mobile / Globalive). That's not the case here.
The question of track record is probably less important than what we're seeing from the CRTC now, which is that the Commission is going to make companies fulfill the commitments they make when granted licences. So, somewhat surprisingly, in the past couple of weeks we've seen the CRTC call out Rogers and Corus for alleged non-compliance on licences (including, as you note, the Oprah Winfrey Network here in Canada).
BCE is going to try to continue to make this work, but they have a deadline of the end of the year, so it looks unlikely. But no, I don't see Astral suing Bell: that would get awfully messy, would scare off other suitors, and wouldn't likely be successful.
Indeed, there's a hell-or-high-water clause, which is why BCE is going to continue to do whatever it can to make this work. But if they fail, they'll have to cut a $150-million cheque to Astral. Still, that would be small consolation for Astral's owners, who were looking for a payday of 20-times that amount for the whole company.
By the way, this isn't the only place for us to answer your questions. We're working on another big package on this deal for tomorrow's paper, so send your queries our way if there's anything you'd like to see answered.
Hi everyone - sorry to be absent. Was on a call.
Interesting side note - the break fee puts $150-million in the company's coffers. The actual deal would have led to a $50-million payout to the Greenberg family, who held a special class of shares.
Hi Mr. Finch. (First of all, let me say I'm a big fan of your legal work.) Yes, I don't think I'm giving anything away to say we were all surprised at how this went down. Adam Shine, an industry analyst with National Bank, wrote this in his morning note: "The CRTC’s decision has been made, but we wonder if any real effort was put into finding a workable solution that would have entailed conditions and divestitures to actually cope with the concerns expressed by intervenors leading up to and during mid-September hearings."
The Commission's wording was quite interesting - they said there's no evidence *on the record* that Netflix is having an effect on broadcasters. They didn't say it won't in the future (and Bell's argument was that this is all about preparing for the future). I'd have to agree, though, about Netflix: viewership data puts it at about 10-million hours a week ( vs. roughly 600-million hours watched by Canadians in an average week).
Hi Disparishun, yes, you're right: Astral employees have said they've been working under some pretty bare-bones conditions in the past few years, as the company readied itself to be sold off. So, for them, it's going to be a hard and uncertain time.
Yes, it's gravy for Astral, but it's a small consolation, especially when the future is so uncertain now. Also, Dvai Ghose, an analyst with Canaccord Genuity, noted last night that $50-million translates into $2.68 per basic share of Astral - which is good, but certainly not good enough to make up for the roughly $14 premium BCE was paying.
We've got only a few more minutes here, so hit us with your comments and questions if you've got 'em.
Okay, we're going to have to sign onff. Thanks for all of your comments and questions.