New CEO announced for Cogeco, Audet vows family to retain control

MONTREAL — Despite a generational change at the helm of Cogeco Inc., the company is promising to stick to its existing vision and strategy, outgoing CEO Louis Audet and incoming CEO Philippe Jetté outlined at a press conference Tuesday afternoon. The company announced earlier in the day that Audet will be stepping down after 25 years as at the helm of the company, and Jetté will take over as of September 1, only the third CEO in the company’s history. While Jetté is also the first CEO to hail from outside the Audet family, Audet noted Tuesday that the family is “committed to continuing to control this company, and let it grow and encourage it to grow as we have done for the last 60 years.” That commitment does not include a sale to Rogers Communications Inc. In response to a Wire Report question about an analyst note that said speculation about a potential sale could reignite given the leadership transition, Audet said that “these analysts are living in fantasy land.” “Our company is not for sale, nor is any part of it for sale. That is not our desire, our intention. The controlling family, the Audet family, which I have the great privilege to represent, intends to continue developing this company to its fullest,” he said. Referencing the company’s financial performance, he said “we have been performing at the top of the class. So we see absolutely no reason why we wouldn’t continue.” Aravinda Galappatthige, analyst for Canaccord Genuity, said in note earlier in the day that “market speculation on the divestiture of Canadian cable operations to could reignite.” He added that while he doesn’t believe a sale is imminent, it’s a possibility in the longer term. Rogers currently holds a stake in the company that Galappatthige said last year has a total market value of $1.53 billion. Audet said Tuesday that it’s a “passive investment that they decided to do. I’m not sure it’s the optimal use of their capital, but it’s their decision. They have the right.” Jetté, who has an electrical engineering background, joined Cogeco in 2011 as senior vice-president and chief technology and strategy officer. In 2015, he became the head of the company’s business unit, Cogeco Peer 1. Jetté said that seven years has given him a deep understanding of the company. “I know, having been part of shaping the initiatives and the strategy of Cogeco, that there is a lot of success in front of us and I am convinced that the future will be fruitful,” he said. He outlined during the bilingual press conference that he plans to continue with the company’s existing strategy, and declined to offer any further details about his priorities or things he’d like to accomplish in the next few years. “For today, it will be quite simple. Really, to work with very closely with Louis to ensure a very disciplined transition for the next three months. I’m fully focused and remain fully focused on Cogeco Peer 1 until September 1, and past September first, I’m sure we will have many other opportunities to continue that conversation,” he told reporters. Audet said finding a new CEO was a “systematic, disciplined process” that began two years ago when he advised the board he planned to step away from his responsibilities by the time he turned 70. He added he will be 67 in a few weeks, making “this an opportune time to pass the baton to the next generation of managers, and be available in a transition period as executive chairman” for the next few years. That will allow him to “assist with the major decision-making, with acquisitions, but most of all, to assist Philippe so that we execute a totally successful transition, and at the end of these three years he is then fully conversant in the knowledge that I will have transferred to him as much as I can.” At that point, Audet will step into a regular, non-executive chairman role, he said, noting the plan will allow the company to manage the transition smoothly without any rush. Audet also answered questions about his future. Emphatically stating he has no interest in politics following a question on the subject, he said he plans to focus on causes he’s been passionate about in the past. He’s previously called on the government to welcome greater numbers of international refugees. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Bryson Masse at bmasse@thewirereport.ca

New CEO announced for Cogeco, Audet vows family to retain control

News | May 15, 2018

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New CEO announced for Cogeco, Audet vows family to retain control

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