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As Astral posts gains, Greenberg looks to rescue BCE deal

Astral Media Inc.'s President and CEO Ian Greenberg poses before the company's annual shareholders meeting in Montreal, December 9, 2010.

SHAUN BEST/Reuters

BCE Inc.'s $3-billion takeover of Astral Media Inc. might be on its deathbed, but Ian Greenberg isn't ready to give up on the deal just yet.

As Astral – the company he co-founded with his brothers 50 years ago – reported its 16th consecutive year of revenue gains, Mr. Greenberg said both companies are determined to work every possible angle to save the deal after it was rejected last month by Canada's broadcast regulator.

BCE has asked the federal cabinet to overturn the Canadian Radio-television and Telecommunication Commission's rejection of the deal, and despite a series of cabinet ministers saying they didn't want to get involved in a regulatory matter, BCE said it hasn't actually heard anything since making the request two weeks ago.

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"The fact is we are under agreement at least until Dec. 16 and either party can extend it to Jan. 15," Mr. Greenberg said. "We are committed to see if there's a way to complete this transaction. … This is our focus."

If the government doesn't get involved, the companies are likely to try their hands at the Federal Court of Appeal. As a last resort, they could also try to restructure the deal in a way that would satisfy regulators that it would be in the best interests of Canadian consumers. The deal received 99-per-cent support from Astral shareholders and was approved by a Quebec court prior to the CRTC's intervention.

"We are assessing our alternatives," Mr. Greenberg said.

Astral has spent $12-million on "transaction expenses" since the deal was announced in the spring. If the regulator's decision leads to the deal's collapse, Bell must pay Astral $150-million.

The company, which owns dozens of radio stations and a slew of high-profile specialty channels such as HBO Canada and The Movie Network, said consolidated profit increased by 14 per cent over past year to $54.3-million in its fourth quarter, as revenue increased 2 per cent to $247.6-million.

BCE chief executive officer George Cope said his company believes the CRTC didn't follow its own rules and should be forced to do so by cabinet, something he's likely to underline Thursday when his company reports its earnings and updates its shareholders on the deal.

With the takeover now uncertain, other Canadian media companies have been taking a look at what assets they might like to own if Astral is broken up. Mr. Greenberg previously said that while he wasn't in a rush to sell, his family felt it was time to unload its controlling stake.

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Rogers Communications Inc. expressed an interest in some of the company's specialty channels last month. Torstar Corp. chief executive officer David Holland said his company, which has some television production investments, would not likely be among those bidding for Astral assets.

"Any assets that might come out of this process probably benefit from scale," he said, as his company reported a $14-million third-quarter profit. "We are likely to have very, very limited interest."

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