Terra Towers Suit Cites Goldman, Peppertree and Others in Merger Conspiracy

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Continental Towers LATAM Holdings Limited announced yesterday they have filed a lawsuit against the Broward County, FL-based company Torrecom Partners, LLC. The lawsuit alleges a conspiracy in coordination with Continental’s minority shareholders, Goldman Sachs and Peppertree Capital Management, to depress the company’s value and force a merger that would enable Continental’s minority shareholders to squeeze its majority shareholder out of the post-merger entity.

In their lawsuit, Terra Towers, Corp., majority shareholder of Continental Towers with a portfolio of sites in Latin America, accused the minority shareholders of orchestrating the merger with Torrecom as early as 2017. Using Torrecom as a disguised third-party buyer, the complaint alleges, Goldman and Peppertree-appointed board members breached their fiduciary duties to the company and allegedly negotiated and agreed to terms of a sale detrimental to Continental.

When asked to comment on the matter, Howard Mandel, Co-President of Peppertree Capital Management, Inc. told Inside Towers, “Our reputation for integrity over more than two decades of business dealings speaks for itself. The plaintiff in that lawsuit, unfortunately, has earned quite a different reputation.”  

The complaint also alleges that Goldman and Peppertree systematically blocked multiple growth opportunities, including a lucrative contract awarded by Spanish carrier Telefonica to build 200 towers in Guatemala and Nicaragua. Torrecom claims Goldman and Peppertree’s alleged attempts to depress the value had the secondary effect of improperly limiting Torrecom’s competition. In addition, the complaint alleges that Goldman Sachs planned to provide Torrecom with the debt financing to acquire Continental, creating a potential conflict of interest, with Goldman acting both as a seller and a lender to the buyer.

“This complaint alleges a series of actions undertaken by the minorities in coordination with Torrecom to deprive the company of numerous profitable opportunities,” says Enrique Canton, an executive and spokesperson for Terra Towers. “The minorities have risked their investors’ investment in Continental by rejecting thousands of tower development projects. They also violated Continental’s shareholder agreement by signing confidentiality agreements and negotiating a sale on behalf of Continental without informing Terra, the majority shareholder of the company.”

“We are prepared to take all necessary actions to prevent this takeover attempt. We are surprised and disturbed that Torrecom’s leadership agreed to collude with Goldman and Peppertree. Like Peppertree, Torrecom is a private equity-backed entity whose leadership has a fiduciary duty to the institutional investors entrusting them with millions of dollars,” Canton said. “These are outside actors with no real commitment to the long-term development of our region, and when they engage in this kind of ruthless, short-sighted corporate maneuvering, they hinder the economic growth of the emerging markets where we operate by rejecting thousands of projects that would’ve otherwise enabled carriers to expand their coverage into communities that desperately need better telecommunications services,” Canton said.

Terra Towers has a portfolio of more than 4,800 telecom structures and sites in Central and South America, South Africa, the Philippines and the United States. The complaint is filed as Broward County Case Number: CACE21006643.

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