Manitoba Telecom Services Inc. said Tuesday that its long-time chief executive officer Pierre Blouin plans to retire at some point later this year, a move analysts say suggests the company is not looking for a buyer any time soon.
Mr. Blouin, who has held the top job at the Winnipeg-based regional telecommunications provider since December, 2005, will remain with MTS until a successor is found and a formal retirement date is set, the company said in a statement.
“I am very proud of what we have accomplished over the past decade, and felt that this was the right time to transition to new leadership,” the 56-year-old Mr. Blouin said in the statement. He was unavailable for interviews Tuesday.
Before joining MTS, Mr. Blouin spent more than 20 years at BCE Inc., where he held various roles including group president of consumer markets for Bell Canada and president and CEO of Bell Mobility.
MTS said it will consider both internal and external candidates to replace him and has begun a search for a new CEO with the help of executive recruiters.
“Pierre Blouin has done an exemplary job as CEO of MTS Allstream during a decade marked by significant change and intense competition across both the MTS and Allstream businesses,” chairman of the board David Leith said.
Mr. Blouin was eligible to begin receiving his full pension as of 2013 and in lieu of that payment has received an annual grant of $450,000 worth of restricted share units. A spokeswoman for the company said any further financial details related to his retirement would be disclosed in its proxy circular next year.
He received total compensation – including a salary of $850,000, share-based awards and a bonus – of $4.3-million in 2013.
Mr. Leith highlighted Mr. Blouin’s accomplishments during his tenure, pointing to operating metrics such as leading market share and profit margins in MTS’s home market and wrestling with the company’s pension funding issues and cleaning up its balance sheet.
He also inherited a challenge in the company’s Allstream division, which his predecessor Bill Fraser acquired shortly before Mr. Blouin took the helm as CEO. The fibre-optic telecom provider offers telecom services to government and businesses across Canada and has been a drag on MTS’s share price over the past decade.
MTS finally struck a deal last year to sell it to Accelero Capital Inc. for $520-million; however, Ottawa blocked the sale to the investment firm founded by Egyptian billionaire Naguib Sawiris in October on the basis of national security concerns.
MTS shares have climbed 6 per cent on speculation it, too, could be a takeover target since BCE announced plans to privatize its Eastern Canada affiliate Bell Aliant Inc. in a $4-billion deal last month. (BCE owns 15 per cent of The Globe and Mail.)
However, analysts said Tuesday the announcement of Mr. Blouin’s retirement suggests a near-term sale of either the Allstream division or MTS itself is unlikely.
“We believe the leadership change is an opportunity for MBT to focus on the core operations and further transform Allstream away from legacy services and into next-generation IP,” Scotia Capital Inc.’s Jeff Fan wrote in a report to clients, noting that the CEO change could be a sign the company will focus more on operations versus potential sale activities.
“We do not believe Mr. Blouin’s retirement is a sign that MBT is once again ‘in play,’” he added.
Mr. Blouin faced tough conditions throughout almost a decade as CEO, Dvai Ghose, head of research at Canaccord Genuity, said in an interview Tuesday, noting that in addition to Allstream, the Manitoba wireless market became one of the most competitive in the country.
“In the midst of some very aggressive pricing from Shaw [Communications Inc.] on the wireline side in and the national incumbents on the wireless side, he’s maintained very high market share and good customer satisfaction and good service,” Mr. Ghose said.
He noted he sees limited downside in MTS shares given its current 5.6-per-cent dividend yield and the fact that a further dividend per share cut is unlikely.