Crown Castle (CCI) CEO to step down amid Elliott pressure; Shares gain

December 8, 2023 7:19 AM EST
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Following their initial letter to the Crown Castle (NYSE: CCI) board in late November, activist investor Elliott Investment Management issued a follow-up letter to the board yesterday, emphasizing the need for strategic changes and a review of the fiber business.

The hedge fund points to CCI's underperformance compared to peers and positive feedback from investors and analysts since its initial letter to the board in November.

In response to the pressure, CCI's long-term CEO, Jay Brown, has announced his retirement. The Board has appointed Anthony Melone, a member of Crown Castle’s Board, to begin serving as interim CEO at that time.

CCI shares added 1.6% in response to this development.

While Elliott acknowledges this as a positive step, they assert that additional significant changes are necessary for Crown Castle to maximize value for shareholders.

“We believe that additional significant changes are needed to ensure that Crown Castle is best positioned to fulfill its potential for shareholders,” it is said in a letter.

“We look forward to continuing our dialogue with the Company’s Board regarding the necessary next steps, including a comprehensive review of the Fiber business, meaningful governance enhancements and a robust and transparent search process for Crown Castle’s next CEO,” Elliott says.

Jefferies analyst Jonathan Petersen believes that "a reevaluation of CCI's fiber business seems increasingly likely."

"We expect the Board and new management will take a serious look at the fiber business and either sell the assets or try to extract revenue in more traditional ways for a fiber business," Petersen said in a note.

By Senad Karaahmetovic

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