CRTC Approves BCE Sale

By: Errol Mars

The CRTC today approved, subject to certain conditions, the purchase of BCE Inc.'s broadcasting assets by a group that includes the Ontario Teachers' Pension Plan and three American private-equity firms.

The CRTC announced that is has approved subject to certain conditions the purchase of Bell Canada's parent company BCE Inc. by a group led by the Ontario Teachers' Pension Plan and three American private-equity firms.

"Consistent with previous decisions, we have imposed conditions to address our concerns relating to corporate governance, said Konrad von Finckenstein, Q.C., Chairman of the CRTC."

"These conditions will ensure that control of BCE remains in Canadian hands once the transaction is completed."

The conditions include;

• 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.

In addition, the Commission clarified that for purposes of determining effective control, it will only consider directors to be Canadian who are both Canadian by citizenship or residency and who are designated by Canadian shareholders.

Under Canadian law, foreigners cannot control more than 46.7 per cent of a broadcaster or telecommunications company.

The broadcasting assets involved in this transaction include Bell ExpressVu, cable assets in the province of Quebec and a minority stake in CTVglobemedia Inc.