CCI - Crown Castle Deserves Better: An Open Letter to Shareholders from Crown Castle Co-Founder Ted B. Miller | Benzinga
Provides Detailed Operating Plan to Restore Operational Excellence, Bolster Leadership with Experienced Tower Professionals, Maximize Value of the Company's Fiber Business to Position Crown Castle as Premier Pure-Play Tower Company
Believes Crown Castle Can be Worth at Least $150 in the Next 18 Months if Board Takes Immediate Action to Restore Leadership and Prevent Further Erosion of Shareholder Value
HOUSTON, March 13, 2024 /PRNewswire/ -- Ted B. Miller, co-founder of Crown Castle Inc., (NYSE:CCI) ("Crown Castle" or the "Company") and his investment vehicle Boots Capital Management, LLC ("Boots Capital") today issued the following open letter to the Crown Castle Board of Directors (the "Board"), the Company's employees, and its shareholders:
This is a crucial moment for Crown Castle, its shareholders and employees. It's why we have recommended a slate of four directors who we believe will make a valuable difference with their world class experience, skills and leadership. While the Board has undergone significant change in recent years, this turnover has still left it lacking directors who have the depth of tower operating and public-company CEO experience essential to drive the Company forward. A need for comprehensive leadership change was also put forth by Elliott Investment Management L.P. ("Elliott") in its November 27, 2023 letter to the Board.
At long last, Crown Castle is, after prodding from Elliott, studying the fate of its fiber business. Bankers and lawyers have been hired to do their typical work. That work together with a detailed plan for a fiber sale and a rerating of Crown Castle stock has been completed by Boots and offered to the Company without response.
But in our view the work does not stop there. Crown Castle is in dire need of a top-to-bottom reboot with trusted, long-term leadership. The Company needs a concrete plan for the fiber sale, and then an operational revival informed by people who live and breathe towers. We have devoted seven months to a vetted and detailed plan that we believe will create lasting value through a commitment to operational excellence.
We shared this detailed plan with the Board during a 90-minute meeting in January. Not surprisingly – since only one member of the Board has any experience as an executive of a tower business – there were a very limited number of questions raised, even then primarily asked by advisors. Meanwhile, many shareholders have responded to our approach and nominees with the response: "Why wouldn't Crown Castle do this?" Our nominees provide unrivaled tower-industry experience and expertise and offer a critical operational complement to the academic, legal, telecom-services and asset-management background of the current Board.
As a large shareholder, we expect the Board to have a laser focus on building shareholder value, rather than be involved in "clever" legal maneuvers such as the Cooperation Agreement with Elliott, which was hastily rewritten after we challenged it in court. That agreement is even under more scrutiny, after the Delaware Vice Chancellor hearing our case rejected a Company effort to delay the hearing of the case, saying last week that "there are colorable claims" to the way the Cooperation Agreement was struck. The court also said that the Company should give me advance notice to object should it hire a new CEO or sell the fiber unit.
The court's order should be a sign to all involved in this expensive and distracting litigation: That enough is enough. It's time to stop being adversaries and work together to improve the Company and all shareholder prospects, as we've intended all along.
To be clear: this is not "a trade" for me. I co-founded Crown Castle. I care deeply about the long-term success of the Company. And I am here for the long-term. With our plan, it's time to restore Crown Castle to its prominence as a pure-play tower company, and reestablish it as one of the most strategically important American companies.
Outlined below are details about what our four highly qualified nominees intend to do and why our multi-pronged operating plan to improve Crown Castle is value enhancing.
1) Creating Value From the Fiber Sale
Based on our analysis, since the decision was made to invest in fiber, we believe the unit has required $22 billion of capital and continues to consume over a billion in capital expenditures each year – 2024 management guidance is $1.4 billion alone. The Board has announced that it is studying the possible sale of the fiber segment, and we also believe that the Board is weighing whether to sell the enterprise fiber business while retaining the small cells.
We have spent seven months modeling every possible structure for a sale of fiber from an operational, financial and tax perspective.
While the particulars of any transaction must be evaluated on their own merit, our work has given us a very clear point-of-view: there is much more value to be created by selling an estimated 75% interest in the entire fiber/small-cell ...