More Sabia spin
It is fun to have a ring side seat at Michael Sabia’s damage control tour of Canadian DTM editorial boards. On Wednesday it was the Montreal Gazette’s turn, and the soon-to-be former BCE CEO dealt with many of the appropriate local issues, such as the HQ staying put on Nuns’ Island. He also continued to rewrite history, just as he tried to do at the Globe & Mail earlier in the week.
Here is the first of two great attempts at revisionist history from yesterday’s Montreal Gazette:
The CEO of BCE Inc., fresh from closing the largest leveraged buyout in history, said that after five years of stagnation, the best way to make Bell Canada grow is away from the quarterly scrutiny of public investors. “In a business like ours, investments have long lead times,” Sabia told The Gazette’s editorial board yesterday. “Now we have the opportunity to run the business with the focus on creating value six years down the road rather than on a 90-day basis. And that gives some flexibility with the pacing of capital investment.”
Follow that? Mr. Sabia didn’t like the quarterly scrutiny. This whole privatization thing was his idea, despite what he might have press released some months ago (see post “BCE takeover part 2“, March 29-07).
Better still is the revised storyline regarding the auction process, as his Toronto editorial board story didn’t hold together for a nanosecond (see post “BCE takeover part 18“, July 4-07):
“The challenge facing our board was to always maximize competition, maximize tension and always create a level playing field,” Sabia said. “Tension and competition drives price, and that’s how you create value.” How did the chief executive create tension in a tiny pool of Canadian equity and pension funds, with federal rules that bar foreign investors from having majority stakes? It required a little tweaking of the rules to make sure there was more than one bidder.
“If a given group wanted to sign up three of four other Canadian pension funds or equity firms, we said that couldn’t happen. If they sign them up, they’re not available for other people,” he said.
Odd, that claim. Although Mr. Sabia recruited pension funds PSP and CDP to join the CPP Investment Board and KKR (and later Onex), BCE somehow “said that couldn’t happen”? I think what Mr. Sabia meant to say was: after I brought together a winning team of three or four massive pension funds, the best known buyout fund in the world, and Canada’s largest private equity shop…we then told everyone else that they couldn’t recruit “three or four Canadian pension funds or equity firms…as they wouldn’t be available for other people.”