Why Keep Michael Sabia?
With all due respect to Michael Sabia, who has done a commendable job as Bell Canada (aka BCE Inc.) CEO over the past five years, it is puzzling why one of the private equity investors interested in buying the company wants to keep him around post-acquisition.
According to the Globe & Mail, Cerberus Capital Management LP said they will keep Sabia if they win the three-horse takeover race. It’s a nice gesture that’s also a savvy - yet plain as day - negotiating tactic if you want senior management to support your bid.
Truth be told, it’s really time for Sabia to take his golden parachute and jump from Bell Canada as soon as any deal is consummated. Sure, he’s done a lot of tough “blocking and tackling” to restructure Bell Canada amid an increasingly competitive marketplace but the company is still a long way from being a vibrant competitor at a time when peers such as Rogers and Telus are thriving.
What Bell Canada needs is a fresh start with new owners and a new senior management team. I’m not suggesting everyone needs to be shown the door but why spend $30-billion to acquire something, and then maintain the status quo?
For other views, check out the Financial Skeptic, who asks “if you like the old team why not just buy the stock and hold it in your portfolio”. Meanwhile, Mark McQueen describes the Cerberus move as a “laurel branch” that makes sense given it is “playing catch-up in the race to romance BCE management and the Board’s Special Committee”.
