Southeastern Asset Management Calls on CenturyLink to Sell Assets
February 19 2019 - 10:04AM
Dow Jones News
By Michael Dabaie
Southeastern Asset Management on Tuesday called on CenturyLink
Inc. (CTL) to improve its balance sheet through asset sales.
"Southeastern believes that the company's fiber assets are
extremely undervalued in the stock market, especially considering
the metrics which entities such as infrastructure funds and cable
companies have paid in recent private transactions for fiber
assets. Therefore Southeastern intends to talk to such
infrastructure funds, to cable companies, and to any other
verticals who are heavy users of fiber networks but may want to own
such networks or parts of them," Memphis-based Southeastern said in
a Securities and Exchange Commission filing. The company said it
has a 6.2% stake in CenturyLink.
CenturyLink earlier this month cut its annual dividend to $1
from $2.16. The company also pledged to lower its leverage target
and accelerate its time frame to achieve it.
Southeastern said the dividend cut wasn't the best way to
address balance-sheet concerns, and it will seek to add directors
with financial expertise.
"In light of such private market interest, we believe the
preferred way to improve the balance sheet should be through asset
sales," the firm said.
If assets sales are more likely in the intermediate term than
the short-term, Southeastern said it believes separate target
stocks should be considered for the fiber network business and
consumer business.
"While we disagree with Southeastern's criticism of our recently
announced capital allocation policy, we are engaged in discussions
with Southeastern regarding their suggested director nominees"
CenturyLink said in response to Southeastern.
"CenturyLink continually takes a broad-minded review of its
asset portfolio to assess the best ways to enhance value for all
shareholders," the company said.
CenturyLink shares were up about 1.5%, to $13.94, early.
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
February 19, 2019 09:49 ET (14:49 GMT)
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