SEPTEMBER 11, 2010.

BCE to Pay $1.26 Billion for CTV

By BEN DUMMETT And CAROLYN KING

BCE Inc. plans to acquire the 85% of Canadian broadcaster CTV that it doesn't already own for 1.3 billion Canadian dollars ($1.26 billion), a move it said will help it better compete in the digital age.

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Canadian telecom operator BCE hopes to harness CTV's content.
.Montreal-based BCE, Canada's largest telecommunications company, already owns 15% of CTV. It will acquire the remaining stake from Woodbridge Co., Ontario Teachers' Pension Plan and Torstar Corp.

BCE said that, including the value of its equity stake and C$1.7 billion in proportionate debt, the total transaction values CTV at C$3.2 billion.

In a related development, Woodbridge, which is the investment vehicle of Canada's Thomson family, said it will assume 85% ownership of the Globe and Mail newspaper, with BCE retaining a 15% interest.

BCE's move underscores the efforts of Canada's communications providers to gain greater control over content, in a move to attract new customers to their wireless and wireline phone operations.

In addition to being a leading wireline and wireless phone operator, BCE also offers satellite and IP-television service in competition with Canada's main cable-TV operators Rogers Communications Inc. and Shaw Communications Inc.

Earlier this year, Calgary-based Shaw agreed to buy the television assets of CanWest Global Communications Corp. for about US$1.97 billion, betting it will become increasingly important to own content because customers want more control over when they watch programming and over which device they use to access the content.

At the time the deal was announced, Shaw said it believed CanWest's content will help it differentiate its planned wireless service, which will compete against the wireless offerings of BCE, Rogers and Telus Corp.

CTV operates a television network with 27 stations and 30 specialty channels, and also owns online properties such as CTV.ca, TSN.ca, RDS.ca, MuchMusic.com, MTV.ca and TheComedyNetwork.ca. Its CHUM Radio operation has operates 34 radio stations throughout Canada.

As part of the deal making, Woodbridge is selling its 40% interest in CTV to BCE, Ontario Teachers' Pension Plan a 25% stake in the broadcaster and Torstar a 20% stake. Torstar said it will generate C$345 million in cash proceeds from the sale.

Write to Ben Dummett at Ben.Dummett@dowjones.com and Carolyn King at carolyn.m.king@dowjones.com

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