By Svea Herbst-Bayliss and Samrhitha A
(Reuters) -Activist investor Elliott Investment Management on Monday said it was ready to nominate directors at Crown Castle International and push for the ouster of the wireless tower owner’s executives and board members, whom it blames for years of underperformance.
The hedge fund in a letter released on Monday said the company needs “comprehensive leadership change.” It said it was ready to appeal to other shareholders to make changes to the 12-member board, signaling a possible proxy fight next year.
It also wants the company to review its fiber strategy, including considering a possible sale of the business.
It is the second time the U.S. hedge fund is publicly pressuring the company after it urged management to rethink its fiber infrastructure strategy and criticized the company’s returns in 2020.
Elliott, which said it now owns a $2 billion stake in the real estate investment trust, said operational underperformance and flawed capital allocation contributed to a sagging share price.
“We are prepared and intend to make our case directly to shareholders with a majority slate of alternative directors at the company’s 2024 annual meeting,” Elliott managing partner Jesse Cohn and senior portfolio manager Jason Genrich said in the letter.
Shares of Crown Castle climbed more than 6% in premarket trading.
“Crown Castle suffers from a profound lack of oversight by the Board, which has contributed to its irresponsible stewardship and flawed financial policy,” Elliott said.
The hedge fund criticized Crown Castle for having “disregarded our data-driven analysis” and said “our recommended changes were neither made nor taken seriously.”
“The company’s strategy, led by CEO Jay Brown since 2016, has been a failure, as demonstrated by the breathtaking magnitude of its underperformance,” the letter said.
Crown Castle did not immediately respond to a Reuters request for comment.
(Reporting by Svea Herbst-Bayliss in Providence and Samrhitha Arunasalam in Bengaluru; Editing by Pooja Desai and Mark Porter)
