Just before Christmas, Cogeco Inc. finally got the good news it so desperately wanted to hear: the CRTC had approved its $80-million acquisition of 11 Quebec radio stations from Corus.
With that major hurdle cleared, Cogeco felt confident it could close the acquisition on Feb. 1.
But a new roadblock cropped up this week. Rival firm Astral Media Inc. has filed an application to appeal the CRTC's decision with the Federal Court of Appeal. Astral argues the ruling broke the long-standing common ownership policy with little debate.
For the past 12 years, the CRTC mandated that radio companies can't own more than two stations per band (AM or FM) in one market. Under the proposed takeover, Cogeco will control three Montreal stations on the FM dial. Astral is a bit peeved because it says it has turned down acquisition opportunities in the past to abide by the ownership rule. On top of that, the law was cast aside in this case by a CRTC panel, rather than in an open discussion with formal arguments made by industry players.
Countering, Cogeco says 130 parties put in their comments in the public panel hearing.
Cogeco also says its rivals last-minute efforts "are without merit and constitute a clear attempt to prolong Astral's dominant position in all Québec commercial radio markets despite the CRTC's unequivocal and well-founded decision."
As it stands, Astral is waiting to hear if its application to appeal the CRTC is approved, and Cogeco is still planning to meet its Feb. closing target.
Follow Streetwise on Twitter: @StreetwiseBlogReport Typo/Error