CRTC approves Cogeco's acquisition of 11 Corus radio stations in Quebec
MONTREAL - Cable and media company Cogeco Inc. has more than tripled its radio holdings in Quebec after winning regulatory approval Friday for its $80-million acquisition of 11 stations in the province.
The CRTC said in a ruling that the purchase from Toronto-based Corus (TSX:CJR.B) can go ahead, bringing Cogeco's total stations in Quebec to 16.
However, it also noted that Cogeco has agreed to sell the CJEC-FM and CFEL-FM stations in the Levis-Quebec City market so that it meets ownership requirements. Cogeco will also sell a third station in Sherbrooke, Que.
"This transaction will ensure the maintenance and diversity of information and public affairs programming in Montreal and the regions, which will benefit the entire broadcasting system in Quebec," the CRTC said in its decision.
Cogeco said the deal will allow a diversity of voices in French-language radio in Quebec.
"Promising for the future, the strategy proposed by Cogeco Diffusion represents a sustainable project that will restore competitive balance to Quebec's radio landscape," president and CEO Louis Audet said in a statement.
"We are pleased to now have the opportunity to take part in developing these radio stations for the benefit of the members of the Quebec communities where we have grown," Audet said.
The Canadian Radio-television Telecommunications Commission also approved a request by Cogeco (TSX:CGO) that allows it to maintain a third FM station in Montreal airing talk-radio programs.
But Cogeco said it will sell CKOY-FM in Sherbooke after the regulator nixed a request to transform the radio station into a rebroadcasting transmitter for a Montreal station, saying the region would lose a local voice.
The CRTC also noted that Cogeco has agreed to establish a local news agency that will feed its stations.
"The use of Cogeco Nouvelles content by local stations will enable them to focus their resources on local coverage," the CRTC said.
"The agency could also exchange content with small private independent stations and community stations, allowing for a better coverage of regional issues."
Cogeco said it will revamp the radio stations outside Montreal to ensure local content that's relevant to regional listeners.
"We're eager to work together and innovate to make all of our stations radio hubs that are close to people's lives," said Richard Lachance, vice-president of Cogeco Diffusion Inc.
Corus said when it announced the sale last April that it couldn't see making "adequate" returns in the Quebec market in the current economic, business and regulatory environment.
Corus had operated radio stations in Quebec for the last 10 years.
Astral Media Inc. (TSX:ACM.A), Canada's largest private-sector radio broadcaster and the dominant player in Quebec's radio market, had opposed the transaction.
Cogeco asked the CRTC to relax rules that restrict the number of similar broadcast outlets owned by the same company within a single market.
Cogeco said it will put the three stations up for sale after the deal with Corus closes on Feb. 1.
Shares in Cogeco Inc. closed down $2.13, almost six per cent, at $35.08 on Friday on the Toronto Stock Exchange.