CRTC Approves BCE Purchase

On March 27, 2008, the CRTC approved the purchase of BCE Inc.'s broadcasting assets by the Ontario Teachers' Pension Plan (Teachers') and three American private-equity firms: Providence Equity Partners L.P., Madison Dearborn Capital Partners L.P. and Merrill Lynch Global Partners Inc.  The broadcasting assets include Bell ExpressVu, cable assets in Quebec, and a minority stake in CTVglobemedia Inc. 

 The CRTC is requiring the group of investors to ensure the following changes in the governance structure are made:

• "the number of directors on the Board of Directors must be fixed at 13;
   
• Canadian investors must at all times nominate six directors on the Board, one more than non-Canadian investors, who may designate five;
   
• the Chairman of the Board must be Canadian and cannot be the Chief Executive Officer or a director nominated by a non-Canadian investor;
   
• a second Teachers' representative must sit on the Executive Committee of the Board;
   
• the Independent Programming Committee must consist of Canadians who are not affiliated with non-Canadian investors; and
   
• the threshold for veto rights must be raised to $110 million, approximately 5 per cent of the value of the broadcasting assets"

For the purposes of determining effective control, the Commission will only consider directors to be Canadian who are both Canadian by citizenship or residency and who are designated by Canadian shareholders.

The CRTC revised the value of BCE's applicable broadcasting assets from $109.6 million to $219.1 million, which raises the tangible benefits package to $21.9 million.  As part of this package, the CRTC has directed that $10.5 million be placed in a fund whose annual revenues will support new media initiatives.

Source: CRTC, 03/27/2008