Crown Castle co-founder launches proxy struggle, challenges Elliott settlement | USAEMALL.com

A co-founder of telecommunications firm Crown Castle has nominated a rival slate of administrators to the agency’s board, muddying the waters months after activist investor Elliott Management and Crown Castle signed a cooperation settlement.

Ted Miller, who helped launch the corporate in 1994, alongside along with his funding automobile Boots Capital offered his thesis to buyers in a launch Tuesday, urging the corporate to promote its fiber enterprise and enhance operational effectivity.

The slate of 4 administrators he is nominating contains himself and his son-in-law. Crown Castle stated in a press release rejecting the slate that the Boots Capital nominees “do not possess the relevant expertise and experience.”

The former Crown Castle CEO, who final labored on the firm 20 years in the past, additionally known as the cooperation settlement with Elliott “coercive and disenfranchising” and stated it needs to be put to a shareholder vote.

But Miller and his companions reached out to Elliott Management in an effort to affix forces with the activist across the identical time that Elliott launched its second marketing campaign in November, folks conversant in the matter advised CNBC.

That preliminary contact between Elliott and Boots Capital was by way of an advisor, and no formal proposal or provide to type a bunch was ever made, one other individual conversant in the matter stated. The conversations centered on figuring out potential buyers who had been keen on Boots Capital’s plan for Crown Castle, that individual stated.

Elliott rejected Boots Capital’s entreaties, the folks stated, which they described as searching for funding or entry to buyers.

Now, Miller is publicly excoriating Elliott’s strategy as missing “expertise, vision, and urgency.”

Miller had been making an attempt to lift cash for a special-purpose automobile to launch an activist struggle at Crown Castle previous to Elliott’s November launch and had been in dialog with Crown Castle since at the very least August, the folks stated. One of the folks stated the special-purpose automobile was trying to lift a whole bunch of tens of millions of {dollars} however that it was unable to satisfy that purpose.

Much of Miller’s plan mirrors Elliott’s newest marketing campaign and an earlier effort from the activist in 2020. In each cases, Elliott stated governance modifications and operational enhancements had been wanted.

Shortly after Elliott launched its second marketing campaign in 2023, Crown Castle’s then-CEO stated he would retire, and a number of other weeks later, the corporate stated it will launch a strategic evaluation of its fiber enterprise, as Elliott had requested.

In a letter to Crown Castle dated Feb. 14, Boots Capital’s counsel urged the corporate to place the cooperation settlement to a shareholder vote. The letter stated that Crown Castle’s board had “appeased” Elliott and allowed it to affect board nominations earlier than the cooperation settlement had been signed.

Crown Castle’s counsel disputed these claims in a letter despatched Tuesday.

“Your letter is replete with factual inaccuracies and completely distorts the nature of the relationship between CCI and Elliott,” stated Scott Barshay, associate and company division chair at Paul, Weiss. Barshay is advising Crown Castle.

Miller stated Tuesday that Elliott had shed “93% of its stated investment exposure,” citing the agency’s most up-to-date regulatory submitting.

“Remarkably, the Crown Castle Board did not specifically require Elliott maintain ownership thresholds to keep these privileges,” Miller stated in his letter to Crown Castle chair Rob Bartolo. 

Elliott stated when it launched its marketing campaign that its financial curiosity in Crown Castle was round $2 billion.

An Elliott spokesperson stated that declare was “categorically false.”

“Elliott remains one of the largest investors in the Company and is the largest investor after the three index fund shareholders,” the agency’s spokesperson stated.

Elliott’s financial publicity to Crown Castle stays largely unchanged, one of many folks stated. It shouldn’t be unusual for activists to construction their positions utilizing a mixture of inventory and derivatives, which aren’t totally reported out on regulatory filings.

Crown Castle introduced its cooperation settlement with Elliott in December and added two administrators, together with Elliott portfolio supervisor Jason Genrich.

One month later, on Jan. 30, Boots offered its proposal to Crown Castle’s expanded board. A redacted model of that presentation was hooked up to Miller’s launch. Boots stated that Crown Castle may fetch as much as $15 billion for its fiber enterprise and that by working with Boots and Miller, Crown Castle may present a listing of greater than two dozen potential consumers or financing sources for a sale of the fiber enterprise.

Also included in that presentation was a request that Crown Castle cowl the prices of Boots’ evaluation and pre-proposal outreach, which Miller stated in his launch had been round $5 million.

Crown Castle’s board dismissed the proposal following the decision and their evaluation, in line with the folks acquainted, who famous that the corporate had already employed advisors from Bank of America and Morgan Stanley weeks earlier to conduct the identical work.