Mike Sabia Selling His Ma While Teddy Kicks It Old-School

The biggest leveraged buy-out of all time in the history of the world is taking place – if the coalition of buyers led by the Ontario Teachers Pension plan goes through, there is going to be a lot of junk bonds. Good for BCE stock-holders, bad for the bond holders (and I always thought bonds were the so-called “safe” investment). At this point, unless Telus actually manages to out-do the Teachers, this story is old news: If you don’t already own BCE stock, you aren’t going to be making any cash from this story and thus, who cares?

The real telecom story in Canada is not “Ma Bell,” but rather, Rogers Cable. While Bell Canada has been losing market share in the home phone market, underperforming versus their peers (essentially Rogers and Telus) in their most lucrative market, wireless, and moving at a snail’s pace in the IP game (IP telephony, IPTV, fiber to nowhere) and generally being its big, bad, boring (and wasteful) self, Rogers has been taking care of business.

Check-out Rogers Communications Inc on Google Finance

Expect not only the share-price of Rogers to rise, but expect the dived-end pay-outs to increase as the cash piles up and this stock becomes certified blue-chip. Rogers has wisely invested in infrastructure which has been successfully returning $$$. Just goes to show you what an old-school guy like Ted Rogers can do, as opposed to the “professional” CEO types like Mike Sabia, who in five years at the helm as CEO of BCE, has really only accomplished one thing – selling his beloved company for a high price. Well, Mike, at least you’re good for something – you inherited a bad situation, did absolutely nothing to improve that situation, then finally just sold the mess as-is - enjoy the golden parachute! The story is different at Rogers – no golden parachute CEOs getting ready to jump. As long as Ted is running the show, expect to make money. Mr Rogers won’t need to sell his company to keep his stock-holders happy. Ted does it the old fashioned way – his runs his company well.

DISCLOSURE: I own shares in Rogers. Do your own investment research to see if this stock works in your portfolio. It definitely works in mine!