Will KKR be Michael Sabia’s Legacy?
Since taking over as BCE Inc.’s CEO in 2001, Michael Sabia has had a a pretty rough go of it trying to restructure the company amid increasingly fierce competition. Five years into the job, you have to wonder what Sabia’s legacy will be. Despite a lot of unglamorous blocking and tackling, he hasn’t created much shareholder value, especially compared with how Rogers and Telus have performed. And if you look at BCE’s portfolio, the local phone business is under siege; the satellite-TV unit is being outflanked by cable rivals such as Rogers; and the wireless division has been struggling for several years at a time when the wireless market has been enjoying robust growth.
The question now is whether Sabia’s legacy will be Kohlberg Kravis Roberts amid a report in the Globe & Mail that the New York-based LBO firm may be preparing a friendly takeover bid that could be worth $30-billion. Since KKR is not allowed to acquire BCE due to foreign ownership restrictions, the G&M suggests KKR is trying to recruit Canadian partners such as the Ontario Teachers’ Pension Plan.
If the deal actually materializes, it would be a major development but not terribly surprising given there has been some chatter about leveraged buy-outs of BCE and Telus. One thing you have to wonder about is whether these kind of deals will have any impact on whether foreign ownership rules will be overhauled. If that happens, the telecom market in Canada will be wide open for all kinds of deals.
Update: Bloomberg reports that BCE is not in talks with KKR.
Technorati Tags: Michael Sabia
March 29th, 2007 at 2:24 pm
What did you expect?
- Their phone system is old technology compared to VoIP. (And their new VoIP services to compete are nothing to get excited about)
- Their broadband internet services have already peaked.
(ADSL has much great limitations than cable and FIOS)
- Their cellular services are a joke!
(You can’t get support outside of NA because NO ONE still uses such old technology)
Clearly Bell forgot to invest in R&D to explore new avenues of generating revenue. So I understand if it’s time for Sabia to go.
However, I don’t think we should jump on giving our telco assets away so soon. First, let’s talk about reforming those fools over at the CRTC. Until they give up on wanting to be “different” from every other county on the planet and learn to be more open to the world of technology, and stop being so “Pro-Canadian”, we shouldn’t fiddle with those outside our own gates.
March 30th, 2007 at 9:41 am
Mark, what BCE said, was “no ongoing discussions being held with any private equity investor with respect to any privatization of the Company or any similar transaction. BCE further stated the company has no current intention to pursue such discussions.”
A pretty carefully worded denial, wouldn’t you say? What’s “ongoing” mean, exactly?
But in any event, doesn’t preclude the possibility that the deal would be to give KKR a toehold, which they often do, as I understand it, and which they might well want to do to get in first. Better perhaps to find a partner from there than from the outside.
April 7th, 2007 at 9:16 am
How are BCE employees to beleive a man who 3 days earlier said, ” We are not competitive in our benifits upon retirement. So to become competitive, as of 2012 for those who retire, there will be no more medical benifits after 65 years of age, and in 2017 there will be no benifits at all”!! Does this not look like something that is the AMERICAN WAY!!
This is from the same person who a while back said, ” If a customer is not willing to pay X amount for basic service, then we don’t need them”! ( La Presse)
R and D is long gone, it is now called ” I and D “, Implement and Debug. It is sold to customers out of the box, and then debugged as we go.
April 17th, 2007 at 1:18 pm
Carefully worded indeed. I was very suspicious at the time, and for good reason. LOL.
May 29th, 2007 at 8:20 am
I worked for these guys for 5 years and they did everything they could to their employees to Cut, cut and cut more advantages to create growth for their shareholders…The sorta-union leaders were always doing what the bosses wanted them to do , hoping that one day they would be offered a high profile bogus-managerial job…Man, I worked in customer service at the Business internet center for the first 2 years and Bell wasn’t even able to put the right month billed on the customer’s invoices…I mentioned it and was told that it would be too expensive to correct it…We always were the most expensive service out there and we made this company a real fortune and how do they thank their loyal employees that gave them their sorry lives? No more pension as of 2017, Burn in hell,Bell!