Brian Mulroney set to become Quebecor chair
MONTREAL - Former prime minister Brian Mulroney is set to become chairman of media and telecom company Quebecor in a show of stability following the recent departure of its chief executive and the launch of the controlling shareholder's political career as an avowed separatist.
Mulroney, currently vice-chairman, is expected to be elected chairman on June 19 when Quebecor (TSX:QBR.B) holds its annual meeting, the company said in a filing with securities regulators ahead of the gathering.
"I do think that it does calm the waters because of who Brian Mulroney is," says Karl Moore, a professor at McGill University's Desautels Faculty of Management.
Moore said the change will allow the new senior management team to move on from the distractions of personnel change and run the business.
The change in leadership at the board level follows the departure for undisclosed health reasons of CEO Robert Depatie who masterminded the company's foray into wireless, and the jump into provincial politics by Pierre Karl Peladeau.
Peladeau, son of the company's founder, left his position as vice-chairman earlier this year to run for the Parti Quebecois in the recent provincial election. He won his seat though the separatist party was knocked out of power and is now a considered a PQ leadership contender.
His support for Quebec's separation rattled some investors and newspaper readers outside the province.
Mulroney brings a strong federalist voice to head of the table and could help relations with Ottawa when it comes to possibly launching a national wireless business.
Quebecor bought wireless spectrum licences needed to operate cellphone networks in Ontario, Alberta and British Columbia, in addition to Quebec, in the federal government's auction earlier this year.
It could become a fourth national player to compete with Rogers (TSX:RCI.B), Telus (TSX:T) and Bell (TSX:BCE), but the Quebec company has been cagey about whether it will take up the challenge.
Troy Crandall, a telecom analyst with MacDougall, MacDougall & MacTier, said Mulroney counterbalances Peladeau's sovereigntist stance, providing some comfort to investors and to Ottawa.
"At least now, from an outside observer, it kind of looks like Quebecor is more neutral from a political stance this way," he said in an interview, noting that Ottawa was ill at ease with Peladeau's support for sovereignty.
"It doesn't hurt to be on the federal government's good side when you decide to make some strategic decisions on that," Crandall said.
Quebecor has said it expects to meet with Ottawa soon to let the government know what it assumes to be the "right conditions" to operate a wireless business outside Quebec.
Eamon Hoey, a telecom consultant and senior partner with Hoey Associates, said Mulroney's appointment reassures investors the company will be guided by someone who is admired, well-connected and respected in business circles.
"I think that will send a signal to the markets that they've got somebody of substance who has his hands on the wheel and he is going to fill that team below him," he said.
"I think they've got a strong chairman rather than looking at him as the balance to the Pequistes," Hoey said, adding he sees the change more as a passing of the baton by a key member of the province's business community.
Mulroney, 75, was travelling outside of Canada and couldn't be reached for comment. He has been a director at the Quebec-based company since 1999 and will replace Quebec chamber of commerce president Francoise Bertrand, who has decided to not seek re-election as chairman. He was also chairman of printing subsidiary Quebecor World between 2003 and 2008, when it obtained protection from creditors.
Pierre Laurin, 74, will become vice-chairman and lead director.
Depatie resigned April 28 and was replaced by Pierre Dion, who headed the TVA French-language television network.
According to the regulatory filing, Depatie received $6 million in salary, bonus and pension value last year, after $8.8 million of options were cancelled when he left the company. Quebecor also approved an agreement to pay him $7.8 million in 2014 in recognition of his "outstanding contribution to the success of the corporation."
Peladeau received $6.35 million last year following the cancellation of options.
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Note to readers: This is a corrected story. An earlier version incorrectly stated Pierre Karl Peladeau's title when he stepped down from Quebecor.