Collar departure: “Hard to see a positive read”
June 12, 2023
The normal transition for any departing CEO at a major quoted company is well established. Weeks – and sometimes months – of advanced notice are given to shareholders and the market of an impending change in leadership.
That has not happened in the case of Steve Collar, the suddenly outgoing CEO at SES. Collar will officially go at the end of June.
SES’s shareprice, already in the doldrums fell steadily as the news circulated from last week’s €5.72 to a completely miserable €4.83 (some 13.5 per cent). A year ago its shareprice was around $8.73 (and five years ago, was at the dizzy heights of €21).
No doubt the usual rumour mill will eventually generate the background as to what has happened, but Sami Kassab, the satellite analyst at Exane/BNPP, suggests a number of potential causes. He admits that Collar’s departure is a surprise especially given that SES is on the verge of pocketing $3 billion of FCC compensation for handing over some C-band frequencies to the FCC.
But other success stories (such as the commercialisation of the SES mPOWER fleet) as well as the SES position in the important IRIS² low Earth orbiting consortium.
However, the negatives might also be important. Collar has made no secret of his wish to see consolidation within the industry and was targeting a merger with arch-rivals Intelsat. Perhaps that has gone sour? There’s also the possibility that top-line growth is proving harder to achieve.
SES has as its major shareholder the Luxembourg state, and perhaps something has gone wrong there?
Kassab added: “We believe this unexpected and hasty departure could point to some internal strategic disagreement, perhaps on the Intelsat acquisition, perhaps on the ability to return to top line growth with mPOWER, perhaps on the IRIS² capital commitment. But it could also pave the way for European consolidation. We find it hard to see a positive read across from this announcement.”
Collar, in a typical cheery Tweet, said only that he was “transitioning to the role of cheerleader and occasional Twitter poster.”