UPDATE Crown Castle Inc. (NYSE: CCI) yesterday commented on what it called the “self-serving litigation” brought by Ted Miller and Boots Capital Management. The company said the lawsuit brought by Miller is “without merit and underscores that his activism campaign against Crown Castle is focused on his own self interests.” Crown said those interests include Miller’s appointment to the Board along with three of his “handpicked nominees” which include his son-in-law.
Miller filed a complaint in Delaware state court last week seeking to invalidate the cooperative agreement that Crown Castle’s Board of Directors and Elliott Investment Management announced in December. On February 20, Miller sent a letter to the CCI Board proposing the company re-focus as a pure play U.S. tower company and divest itself from its fiber and small cells operations.
In yesterday’s statement from CCI, the company said Miller is trying to impede progress on its ongoing CEO search along with its review of its fiber business.
“In addition to advancing a self-serving agenda,” Crown’s statement said, “impeding value-creation work that Mr. Miller claims to support, and being premised on a host of misleading assertions and outright inaccuracies, Mr. Miller’s litigation seeks inappropriately to weaponize the Delaware Court’s recent decision in West Palm Beach Firefighters’ Pension Fund v. Moelis & Co. in an attempt to gain an advantage in his proxy fight against the Company.”
Crown Castle asserts it entered into a market-standard cooperation agreement with Elliott on December 19, 2023. Subsequently, on February 23, 2024, the Court issued a decision in Moelis. On March 4, 2024, Crown Castle announced that the Company and Elliott had agreed to amend certain provisions of the Cooperation Agreement to:
- Clarify that the Board retains the power at any time to change its recommendation regarding any director nominees, consistent with its fiduciary duties;
- Eliminate limitations on the sizes of the Board, the Fiber Review Committee and the CEO Search Committee; and
- Provide that Elliott’s shares will vote pro rata with the votes of other stockholders instead of requiring Elliott to vote its shares in favor of the Board’s recommendations.
The Crown Castle Board has 12 directors, 11 of whom are independent and only two of whom, according to CCI, were appointed with input from Elliott.
“Contrary to Mr. Miller’s misleading allegations and distinct from Moelis,” Crown’s statement said, “Elliott did not control Crown Castle before or as a result of the Cooperation Agreement. Today, In truth, Mr. Miller is the one who seeks to dominate Crown Castle by having the Company name him executive chairman and put two of his associates and his son-in-law on the Board.”
Crown said Miller is seeking approximately $5 million in compensation for his Boots Management team along with an “unjustified degree of control” over Crown Castle “despite owning far less than one percent of the Company.” Crown said the majority of Miller’s investment position is held in the form of call options with less than one year of duration.
In conclusion, Crown said Miller’s proxy fight and his lawsuit seek, above all else, to prioritize his own interests, regardless of the consequences for Crown Castle’s shareholders.
By Jim Fryer, Inside Towers Managing Editor
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