founder says company could fetch up to $15 bln for fiber assets

Nordic LEVEL AB

20/02/2024 15:23

(Adds Crown Castle share reaction in paragraph 5)
    By Greg Roumeliotis
       Feb 20 (Reuters) - Crown Castle's  CCI.N  co-founder Ted
Miller said on Tuesday that the U.S. telecommunications
infrastructure company could fetch as much as $15 billion by
selling its fiber assets if it let him and his partners join its
board of directors.
    Miller told Reuters in an interview that he and his team
were best positioned to find buyers for the fiber business and
help Crown Castle upgrade its tower assets so it can keep up
with advances in wireless network technology.
    "When you create a company from scratch and take it public,
you learn a lot more than when you take over from someone else,"
Miller said.
    A spokesperson for Crown Castle did not immediately respond
to a request for comment on Miller's demands. The Houston-based
company said in December it would explore a sale of its fiber
business after reaching a deal with hedge fund Elliott
Investment Management over shaking up its board. 
        Crown Castle shares rose 1.5% to $109.84 on Tuesday
morning in New York. 
  
    Miller has told Crown Castle he can help it fetch between
$12 billion and $15 billion for its fiber assets and that he has
already carried out preparatory work that will save it six
months in finding buyers, so it can complete a deal by the end
of 2024.
    This work, on which Miller said he had spent $5 million,
included signing 25 non-disclosure agreements with prospective
buyers and identifying more than $1 billion in tax benefits that
could be realized if the deal closed this year, Miller said. In
a presentation to Crown Castle's board, Miller said he wanted
the company to assume the cost of the work.  
    The deal's proceeds could be used to pay down debt and buy
back $1.9 billion in stock, he added. 
    Miller, who together with co-investors has a stake in Crown
Castle worth more than $100 million, has asked that the company
appoint him executive chairman and that three of his partners
also join the board of directors. They are former Crown Castle
chief financial officer Chuck Green, former Credit Suisse
investment banker David Wheeler, and Tripp Rice, Miller's
son-in-law and a partner in Miller's firm, 4M Investments. 
    The Wall Street Journal reported earlier this month on
Miller's challenge against Crown Castle's board.
    
    MILLER SEEKS OVERHAUL 
    Miller said he could help eliminate the discount at which
Crown Castle shares trade to peers such as SBA Communications
 SBAC.O  and American Tower  AMT.N  not just through the fiber
divestiture but by improving operations. 
    He has criticized the company for raising its staff
headcount while keep its number of towers steady at around
40,000, and for not fully adopting technological innovations
such as drone data and artificial intelligence.
    "I don't believe Crown Castle has the leadership needed to
right the ship, sell the fiber business, invest in its towers,
restore relationships with major carriers and fix its broken
culture," Miller said.
    Crown Castle is looking for a chief executive after Jay
Brown stepped down last month following more than 7 years at the
helm. Anthony Melone, a former Verizon Communications  VZ.N 
chief technology officer and one of Crown Castle's board
directors, is serving as interim chief executive.
    Miller also criticized Crown Castle's pact with Elliott and
asked that Crown Castle let shareholders vote on it. 
    The agreement, which added an Elliott representative and a
former Level-3 Communications executive to Crown Castle's board,
gave Elliott too much influence without requiring it to stick to
ownership thresholds, Miller said.
    Elliott sold down its investment in Crown Castle from about
$2 billion in December to just $141 million, Miller said, citing
Elliott's most recent regulatory filing.
    An Elliott representative did not immediately respond to a
request for comment.
    Miller, 72, co-founded Crown Castle in 1994 and served as
its chief executive until 2002. He has since founded and served
on the board of several other companies. 
    Crown Castle, which rents out towers to wireless carriers
such as Verizon and AT&T  T.N , has a market value of $47
billion. Its shares have dropped 23% in the last 12 months
versus an 11% decline in American Tower's shares. 

 (Reporting by Greg Roumeliotis in New York; Editing by Sonali
Paul)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 371 8056; Reuters
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net))