Crown Fortress co-founder launches proxy combat, challenges Elliott settlement

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

Ted Miller, who helped launch the corporate in 1994, alongside along with his funding car Boots Capital introduced 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 consists of himself and his son-in-law.

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

However Miller and his companions reached out to Elliott Administration in an effort to affix forces with the activist across the identical time that Elliott launched its second campaign in November, folks aware of the matter informed CNBC.

Elliott rebuffed Boots Capital’s entreaties, the folks mentioned, which they described as looking for funding or entry to buyers. Now, Miller is publicly excoriating Elliott’s strategy as missing “expertise, vision, and urgency.”

Miller had been attempting to lift cash for a special-purpose car to launch an activist combat at Crown Fortress previous to Elliott’s November launch and had been in dialog with Crown Fortress since a minimum of August, the folks mentioned. One of many folks mentioned the special-purpose car was trying to lift a whole bunch of hundreds of thousands of {dollars} however that it was unable to satisfy that objective.

Representatives for Boots Capital didn’t instantly reply to a request for remark.

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

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

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

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

An Elliott spokesperson mentioned 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 mentioned.

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

Crown Fortress 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 introduced its proposal to Crown Fortress’s expanded board. A redacted model of that presentation was hooked up to Miller’s launch. Boots mentioned that Crown Fortress may fetch as much as $15 billion for its fiber enterprise and that by working with Boots and Miller, Crown Fortress may present an inventory of greater than two dozen potential consumers or financing sources for a sale of the fiber enterprise.

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

Crown Fortress’s board dismissed the proposal following the decision and their evaluate, based on the folks acquainted, who famous that the corporate had already employed advisors from Financial institution of America and Morgan Stanley weeks earlier to conduct the identical work.