© Reuters.
HOUSTON – Ted B. Miller, co-founder of Crown Castle Inc. (NYSE: NYSE:) and his investment firm Boots Capital Management, LLC, has publicly addressed the Crown Castle Board of Directors, advocating for significant operational changes to enhance shareholder value.
This move follows recent scrutiny by Elliott Investment Management L.P. and a court’s recognition of “colorable claims” against the company’s current board practices.
Miller’s proposal, presented in a 90-minute board meeting in January, calls for a sale of approximately 75% of the company’s fiber/small-cell portfolio. The plan suggests that this divestiture will reposition Crown Castle as a more capital-efficient tower operator, potentially increasing the company’s EBITDA multiple from 18 to 25 times.
Miller’s analysis indicates that the fiber unit, which requires over $1 billion in annual capital expenditures, has not delivered satisfactory returns on investment and its divestiture could save over $1 billion in tax efficiencies if completed in 2024.
In addition, the proposed changes aim to preserve Crown Castle’s dividend by adjusting its payment strategy to maintain sustainability. The current dividend trajectory, according to Miller, is funded by increasing debt levels, a practice he deems unsustainable.
His long-term plan offers a dividend option that could be covered entirely by cash flow or sustain the current dividend level through a reduced debt strategy.
Miller’s letter also emphasizes the need for a leadership overhaul, criticizing the Board for lacking directors with substantial tower operating and public-company CEO experience. He proposes electing four new directors with over 50 years of combined experience in the tower industry to revitalize the company’s operational excellence.
The Crown Castle co-founder’s initiative underscores his commitment to the company’s long-term success and his belief in the need for a “top-to-bottom reboot” to restore Crown Castle as a leading pure-play tower company. His plan, based on meticulous analysis, aims to create lasting value for shareholders while addressing the company’s operational and leadership challenges.
This information is based on a press release statement from Boots Capital Management, LLC.
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