Astral Media to buy Standard Radio for $1.08B
Astral Media Inc. said Thursday it will pay$1.08 billion to acquire privately held Standard Radio Inc. — a deal that willcreate the largest radio broadcaster in the country.
Astral will pick up Standard's 52 radio stations, which operate in five provinces covering 29 markets.Astral already owns 29 radio stations in Quebec and the Maritimes, plus 17 specialty and pay television services.
Astral said in February that it was in exclusive talks to buy Standard.
The takeover also includes Standard's Integrated Media Sales, a national advertising sales company; Sound Source Networks, a radio content service provider; some interactive assets and two conventional television stations in the northern British Columbia communities of Terrace and Dawson Creek.
Astral said it will pay $880 million in cash and issue 4.75 million Class A non-voting shares worth about $200 million at the current share price to pay for Standard.
Following the closing of the acquisition, Gary Slaight of Standard's controlling familywill join Astral's board of directors. Slaight is Standard's president and CEO.
|Standard Radio assets|
|In Montreal: MIX 96, CHOM and CJAD. |
In Toronto: CFRB, MIX 99.9 and EZ Rock.
In Ottawa: The Bear.
In Winnipeg: HOT 103 and QX 104.
In Edmonton: EZ Rock, The Bear and CFRN.
In Calgary: CKMX, CJAY and VIBE.
In Vancouver: CISL and Z95.3.
It also ownsstations in the Ontario cities of Hamilton, St. Catharines, Pembroke and London; two in Brandon, Man.; and 21 in small B.C. centres.
"I feel a sense of pride today to be able to announce that we have finalized this deal which will see the company that Allan Slaight bought in 1985 and that we have built into the leading private radio group in Canada join forces with a stellar company like Astral Media," said Slaight.
The deal is subject to federal review by the Competition Bureau and the CRTC.
The CEOs of both Astral and Standard told a conference call that they didn't see any competition concerns that might force a sell-off of stations. Even though Astral and Standard both own radio stations in Quebec, the Astral stations operate in French and the Standard stations in English.
The CEOs also said no job cuts are planned.
The companies expect the deal to close in early 2008. Once the takeover is done, Astral will have the largest market share of any radio broadcaster in Canada, with 31 per cent(Astral has 11 per centand Standard has 20 per cent). Corus would be second, with 28 per cent.
Standard Radio's stations have the largest gross margin of any radio chain in Canada at 40 per cent. Astral Media's stations are in the No. 2 spot with a 35 per cent margin.
Astral also said Thursday it has reached a deal with CTVglobemedia Inc. and CHUM Ltd. to acquire full ownership of French-language music channel MusiquePlus Inc. for $34 million.
Astral already owned 50 per cent of the channel, while the remainder was held by CHUM, which is in the process of being acquired by CTVglobemedia.
Investors reacted to Thursday's news by sending shares of Astral up $1.19, or almost three per cent, to $43.69 on the TSX.