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Bell Canada Enterprises (BCE) President and Chief Executive George Cope (L) looks at Astral Media Inc. President and Chief Executive Ian Greenberg as a break is called in the CRTC hearings in Montreal September 10, 2012. A public hearing into Bell's $3.4-billion acquisition of Astral Media got underway on Monday in Montreal. REUTERS/Christinne Muschi (CANADA - Tags: MEDIA BUSINESS)CHRISTINNE MUSCHI/Reuters

Astral Media Inc. confirmed Friday it is in discussions with BCE Inc. to amend a $3-billion takeover agreement one month after it was rejected by Canada's federal communications regulator.

"While it is Astral's policy not to comment on market rumours or speculation, Astral today confirms that it is in discussions with Bell to continue pursuing regulatory approvals for Bell's acquisition of Astral, including, among other options, the filing of an application with the Canadian Radio-television and Telecommunications Commission (CRTC)," the company said in a statement. "The timing and details of any such application have not yet been determined. The Company will keep its investors informed of any significant developments in this respect."

Astral's shares were halted before the opening of markets Friday morning. The stock jumped $7.80 or 18.7 per cent to $49.58 shortly after trading resumed at noon.

Sources suggested a new deal could see some of Astral's assets sold off separately to ensure Bell does not exceed thresholds of market concentration set by the CRTC.

The stakes are high for BCE to complete the Astral acquisition. It is on the hook to pay a $150-million break fee to Astral if its takeover bid fails.

"The acquisition of Astral by Bell is subject to regulatory approval by the CRTC and the Competition Bureau," the Astral statement noted. "As announced on October 25, 2012 , Bell has elected to postpone the Outside Date for an agreement to December 16, 2012 , and each of Bell and Astral has the right to further postpone the Outside Date to January 15, 2013 . There is no assurance that any transaction will occur or occur with the terms and conditions currently contemplated."

The deal, one of the largest in BCE's history, would finally give the Montreal-based company a fully national media presence.

And the communications giant is under pressure to diversify away from traditional telephone and internet services, which are seeing profit margins squeezed by competition. Although telecom giants are pursuing similar strategies globally, BCE, a dominant Internet, wireless and television provider, has limited room to expand in Canada.

It is already the country's largest Internet service provider in Canada, second largest wireless service provider and third largest television distributor. Its dominance in these sectors was a major factor behind the Canadian Radio-television and Telecommunications Commission's decision last month to reject the planned marriage of BCE and Astral

It is unclear which Astral assets are slated for the selling block under the new plan, but one source suggested the bulk of the properties will be English-language broadcast assets.

A source familiar with the deal said the company would likely conduct an auction to sell the various properties, but the sale would be contingent on CRTC approval. Any new deal would first need to be submitted to the commission, and would be subject to a full hearing and vetting process.

The core challenge for BCE will be to satisfy the CRTC that the reshaped takeover plan will not give the company undue power in the television sector. The regulator's most recent annual report found that BCE's services accounted for 33.7 per cent of English-language viewing. Assets wholly owned by Astral have 6-per-cent viewing share, and assets that are jointly held with Corus Entertainment captured an additional 3 per cent of viewership, putting combined viewership for BCE and Astral at 42.7 per cent.

The commission's 2008 Diversity of Voices policy says acquisitions that placed more than 35 per cent of viewership in the control of any one company would be closely scrutinized because of the possibility of a substantial lessening of competition, and those that reached a 45 per cent threshold would be rejected out of hand.

To make the new proposed deal work, Bell could take its chances in selling off its joint-venture properties, which include the Teletoon and Teletoon Retro specialty channels, but that move likely would not be enough to satisfy the commission's concerns about market concentration. Bell could also try selling off some of the English-language assets it already owns, but buyers might be wary. Even then, the CRTC might buck if BCE tried to keep The Movie Network, one of Astral's crown jewels, since its popularity could enable the company to exercise too much power in negotiating carriage for other channels.

And English-language TV is not the only stumbling block. In rejecting BCE's bid last month, the CRTC also expressed concern about the concentration of power in the French-language Quebec market, which would then be dominated by two companies, Bell and Quebecor Inc.

The commission added that there were other reasons for concern. "BCE already controls numerous television and radio services, as well as a national broadcasting distribution service," the CRTC decision said. "It is the largest Internet service provider in Canada, the second largest wireless service provider and the third largest television distributor. The acquisition of Astral Media's services would have created a situation where a company of BCE's size and scale would be able to exert its market power unfairly and hinder healthy competition."

In addition to its television assets, Astral has over 80 radio stations and more than 9,500 out-of-home advertising placements in Ontario, Quebec, and British Columbia.