BCE Acquisition of Astral Media Faces Financial Hurdle, May Pay $300 Million in Extra Fees

BCE is facing a financial hurdle with regards to its recent $3.38 billion acquisition of Astral Media. The telco faces paying hundreds of millions of dollars in unanticipated regulatory fees.

The cost to Bell could reach nearly $300 million, or almost 10% of the total purchase price of Astral. The fees come as a result of Astral’s television and radio holdings: current broadcast regulations demand any company acquiring such licenses must pay transfer fees varying from 6% to 10% of the market value of the assets.

This equates to more than $200 million for Astral’s television licenses, which includes HBO Canada, and over $60 million for Astral’s 84 radio stations across the country.

BCE acquired CTV last April. With Astral under its belt, Bell will be the largest media enterprise in the country. The telco expects the deal to complete by this fall.

But if the bid fails to meet regulatory approval, Bell will cough up $150 million for a break fee. And failure is certainly plausible: the deal would cause Bell to own 42% audience share among English-language television, more than double that of any competitor. The CRTC, which approved the CTV bid, says it will “carefully examine” the acquisition of Astral.