Activist Investor Elliott Calls for AT&T Shakeup
September 10 2019 - 3:58AM
Dow Jones News
By WSJ City
Activist investor Elliott Management disclosed a $3.2bn stake in
AT&T, criticised the company's strategy and called on the
telecommunications giant to shed unnecessary assets.
KEY FACTS
--- The fund will seek seats on AT&T's board and wants it to
sharpen its focus on its core assets.
--- It called on AT&T to boost its profit margins by cutting
at least $5bn in costs, including consolidating offices.
--- It wants the company to review any assets that lack a
strategic rationale.
--- Such as the DirecTV satellite service and its Mexican
wireless operations.
--- It said the company has underperformed the market for the
past decade.
--- It put much of the blame on Chief Executive Randall
Stephenson's (pictured) acquisition strategy.
"AT&T has been an outlier in terms of its M&A strategy.
Most companies today no longer seek to assemble conglomerates."
Elliott Management, In a letter released Monday
"Indeed, many of the actions outlined are ones we are already
executing today. AT&T's Board and management team firmly
believe that the focused and successful execution of our strategy
is the best path forward to create long-term value for
shareholders."
AT&T
Why This Matters
The fund predicted that if AT&T pursues the strategic and
operational improvements Elliott suggests, the shares could be
worth more than $60 by the end of 2021.
The challenge to the company's strategy comes less than a week
after AT&T named longtime executive John Stankey to its newly
created chief operating officer position, a move widely seen as
preparing him to eventually succeed Stephenson. Elliott questioned
the executive change and asked whether AT&T conducted an
external review for the new No. 2 position.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
September 10, 2019 03:43 ET (07:43 GMT)
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