MONTREAL – Astral Media CEO Ian Greenberg confirmed this morning his company was one of just two invited to make an offer for CHUM Limited.
During a conference call with financial analysts discussing the company’s third quarter results, Greenberg responded to the speculation that Astral was in the mix.
Not wanting to bid too high, and taking into account that with no conventional TV assets, synergistic possibilities with Astral are not as great as CTV owner Bell Globemedia, Greenberg said his company made a bid that wasn’t big enough.
"Equity was available. It was not a problem in that sense," he said, answering a question about whether Astral could find enough money. "We were invited to participate in the process," and analyzed the potential with "rigour and discipline," said Greenberg.
"We went as far as we could that made sense but in the end there was a superior bid."
While BGM has pretty deep pockets, the acquisition means they’re "going to be levered up pretty good," added Greenberg.
A research note from BMO Capital Markets analyst Tim Casey bears that opinion out. "We estimate that post-transaction, BGM will carry roughly $3 billion in debt versus roughly $450-500 million in EBITDA, representing a debt/EBITDA ratio in the 6.5x range," he wrote, noting an IPO for BGM may come soon after its own rearrangement and the CHUM purchase is done.
