Asserts That Crown Castle's Cooperation
Agreement Struck Prior to Company's Nomination Window
Disenfranchises Shareholders and Entrenches Board
Cooperation Agreement Granted Two Board Seats
and Does Not Require Elliott to Retain Equity Ownership in Company,
Thereby Misaligning Elliott's Incentives with Long-Term Interests
of Company and Shareholders
Urges Crown Castle to Immediately Put
Cooperation Agreement to a Shareholder Vote to Restore Transparency
and Credibility
HOUSTON, Feb. 28,
2024 /PRNewswire/ -- Ted B. Miller, co-founder
of Crown Castle Inc. (NYSE: CCI) ("Crown Castle" or the "Company")
and his investment vehicle Boots Capital Management, LLC ("Boots
Capital") today filed a complaint in the Court of Chancery of the
State of Delaware (the "Court")
seeking to invalidate the cooperation agreement between Crown
Castle's Board of Directors (the "Board") and Elliott Investment
Management, L.P. (together with its affiliates, "Elliott")
announced on December 20, 2023. Under
the terms of the cooperation agreement, Elliott and the Company
appointed two new directors, Jason Genrich, Partner at
Elliott, and Sunit Patel, Chief
Financial Officer of Ibotta Inc. (collectively, the "Elliott
Directors"), to the Board. Elliott received substantial governance
rights without the customary provision that it be required to
maintain an equity ownership position in the
Company.1
Mr. Miller stated: "The Crown Castle Board's short-sighted
decision to enter into this fundamentally unlawful cooperation
agreement just prior to the Company's nomination window is yet
another example of the Board's poor governance, lack of
accountability, hostility towards its shareholders, and track
record of flawed decision making, all of which have resulted in the
destruction of tens of billions of dollars in shareholder value.
Moreover, the terms of the cooperation agreement granted Elliott
certain governance rights without requiring it to maintain an
equity ownership position in the Company, grossly misaligning
Elliott's short-term profit incentives with the long-term interests
of Crown Castle and its shareholders. Submitting the cooperation
agreement to a shareholder vote is a necessary step to help restore
the Company's credibility with investors and forestall costly and
distracting litigation, which could delay a sale of the Company's
fiber assets and further erode shareholder value. However,
given the Board's continued refusal to put the unlawful cooperation
agreement to a shareholder vote, we have filed this lawsuit to
defend the rights of Crown Castle's shareholders."
The complaint alleges the
following:
- The cooperation agreement directly infringes upon the Board's
powers and responsibilities, and substantially restrains the
Board's ability to use its own best judgment on key management
matters in violation of Section 141 of the Delaware General
Corporation Law and confers outsized concessions upon Elliott,
including a commitment to include the Elliott Directors on the
Board's slate in the 2024 election and guaranteed Elliott
representation on key Board committees.
- The terms of the cooperation agreement are invalid and
unenforceable as a matter of Delaware law, as reflected most recently in
the February 22, 2024 written opinion
by Vice Chancellor Travis Laster, in
the case West Palm Beach Firefighters' Pension Fund v. Moelis &
Company.2
- The Company breached its own bylaws through its entry into the
cooperation agreement, which impermissibly constrains the Board's
authority on key governance matters in direct violation of certain
of its bylaw provisions, a matter further reaffirmed in the recent
Laster opinion in the Chancery Court.
- Elliott and the Elliott Directors knowingly aided and abetted
the director defendants' breaches of fiduciary duty outlined in the
complaint and provided them with substantial assistance.
Mr. Miller added, "It is unconscionable that the Company's
current Board has just seven total years of tower industry
operating experience, even after the recent addition of new
directors. To that end, we believe Crown Castle's Board must be
reconstituted with directors that have the necessary industry
expertise and skillsets to execute a long-term strategy that
will enhance operational excellence, fix the Company's broken
culture, and restore and unlock meaningful value for long-suffering
shareholders."
On February 20, 2024, Mr. Miller
nominated a slate of four highly qualified director candidates who
collectively would bring more than five decades of successful
global tower industry experience to the Crown Castle Board. Mr.
Miller and the nominees have presented a detailed and actionable
plan to the Board to optimize the value of Crown Castle's fiber
assets, digitize its tower portfolio, materially improve its
operations and go-to-market strategy, rebuild its management team
with experienced executives, repair its broken company culture, and
deliver significantly improved financials to restore and drive
shareholder value. In addition to this detailed operating plan, Mr.
Miller and the nominees have led and shared with the Company a
six-month due diligence process with 25 prospective buyers and
financing sources to increase the speed and certainty of completing
a sale of Crown Castle's fiber assets this year, before potential
tax benefits of over $1 billion
expire at the end of 2024.
Heyman Enerio Gattuso &
Hirzel LLP and Woolery & Co. PLLC are serving as legal advisors
to Mr. Miller.
The case number is 2024-0176.
INVESTOR AND MEDIA CONTACTS
Investors:
Morrow Sodali LLC
Paul Schulman/William Dooley/Jonathan
Eyl
By Phone: 1-800-662-5200 or 203-658-9400
By Email: Boots@info.morrowsodali.com
Media:
Jonathan Gasthalter/Nathaniel Garnick/Grace
Cartwright
Gasthalter & Co.
By Phone: 212-257-4170
By Email: bootscapital@gasthalter.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information herein contains "forward-looking statements."
Specific forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts and
include, without limitation, words such as "may," "will,"
"expects," "believes," "anticipates," "plans," "estimates,"
"projects," "potential," "targets," "forecasts," "seeks," "could,"
"should" or the negative of such terms or other variations on such
terms or comparable terminology. Similarly, statements that
describe the Participants' (as defined below) objectives, plans or
goals are forward-looking. Forward-looking statements are subject
to various risks and uncertainties and assumptions. There can be no
assurance that any idea or assumption herein is, or will be proven,
correct. If one or more of the risks or uncertainties materialize,
or if the underlying assumptions of Boots Capital (as defined
below) or any of the other Participants in the proxy solicitation
described herein prove to be incorrect, the actual results may vary
materially from outcomes indicated by these statements.
Accordingly, forward-looking statements should not be regarded as a
representation by Boots Capital or the other Participants that the
future plans, estimates or expectations contemplated will ever be
achieved. You should not rely upon forward-looking statements as a
prediction of actual results and actual results may vary materially
from what is expressed in or indicated by the forward-looking
statements. Except to the extent required by applicable law,
neither Boots Capital nor any Participant will undertake and
specifically declines any obligation to disclose the results of any
revisions that may be made to any projected results or
forward-looking statements herein to reflect events or
circumstances after the date of such projected results or
statements or to reflect the occurrence of anticipated or
unanticipated events.
Certain statements and information included herein have been
sourced from third parties. Boots Capital and the other
Participants do not make any representations regarding the
accuracy, completeness or timeliness of such third party statements
or information. Except as may be expressly set forth herein,
permission to cite such statements or information has neither been
sought nor obtained from such third parties. Any such statements or
information should not be viewed as an indication of support from
such third parties for the views expressed herein.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Boots Capital and the other Participants (as defined below)
intend to file a preliminary proxy statement and accompanying GOLD
universal proxy card (the "Proxy Statement") with the Securities
and Exchange Commission (the "SEC") to be used to solicit proxies
for, among other matters, the election of its slate of director
nominees at the 2024 annual meeting of shareholders (the "2024
Annual Meeting") of Crown Castle Inc., a Delaware corporation ("Crown Castle" or the
"Corporation").
The participants in the proxy solicitation are currently
anticipated to be Boots Parallel 1, LP, Boots, LP (and together
with Boots Parallel 1, LP, the "Boots Funds"), Boots Capital
Management, LLC ("Boots Capital"), Boots GP, LLC ("Boots GP"),
4M Management Partners, LLC
("4M Management Partners"),
4M Investments, LLC ("4M Investments"), WRCB, L.P. ("WRCB"),
Theodore B. Miller, Jr. and
Tripp H. Rice (collectively, the
"Boots Parties"); and Charles Campbell
Green III and David P.
Wheeler (together with Mr. Miller and Mr. Rice, the "Boots
Nominees," and together with the Boots Parties, the
"Participants").
Boots GP, as the general partner of each of the Boots Funds, and
4M Management Partners, as the
investment advisor of each of the Boots Funds, may each be deemed
to beneficially own interests in an aggregate of 784,009 shares of
the Corporation's common stock, $0.01
par value (the "Common Stock") held in the Boots Funds (including
interests in 182,997 shares of Common Stock underlying
over-the-counter forward purchase contracts and interests in
601,012 shares of Common Stock underlying over-the-counter share
option contracts). WRCB beneficially owns interests in 135
shares of Common Stock underlying a call option. Mr. Miller
has direct ownership of 200 shares of Common Stock, which includes
100 shares of Common Stock held of record and 100 shares of Common
Stock held of record as tenant in common with his wife. In
addition, Mr. Miller may be deemed to beneficially own interests in
an aggregate of 784,716.958 shares of Common Stock (which includes
interests in 784,009 shares of Common Stock held by the Boots
Funds, which Mr. Miller may be deemed to beneficially own as the
President and managing member of 4M
Management Partners and a Manager and the President of Boots GP,
interests in 400 shares of Common Stock underlying call options
owned beneficially and as a tenant in common with his wife,
interests in 135 shares of Common Stock underlying a call option
owned beneficially by WRCB, which Mr. Miller may be deemed to
beneficially own as sole member of one of the general partners of
WRCB, and 172.958 shares of Common Stock held through the
Corporation's 401(k) Plan in the Crown Castle Stock Fund. Mr.
Rice is the record holder of 100 shares of Common Stock and, as the
Vice President of 4M Management
Partners and a Manager and the Vice President of Boots GP, Mr. Rice
may be deemed to beneficially own interests in 784,009 shares of
Common Stock held by the Boots Funds. Mr. Green beneficially
owns 1,736 shares of Common Stock in joint tenancy with his
wife. All of the foregoing information is as of the date
hereof unless otherwise disclosed.
IMPORTANT INFORMATION AND WHERE TO FIND IT
BOOTS CAPITAL STRONGLY ADVISES ALL SHAREHOLDERS OF CROWN CASTLE
TO READ THE PRELIMINARY PROXY STATEMENT, ANY AMENDMENTS OR
SUPPLEMENTS TO SUCH PROXY STATEMENT, THE DEFINITIVE PROXY
STATEMENT, AS WELL AS PROXY MATERIALS FILED BY CROWN CASTLE AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S
WEBSITE AT WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY
SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT
CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE
DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
1 For example, Pinterest, Inc. entered into a
cooperation agreement with Elliott on December 6, 2022, and Cardinal Health, Inc.
entered into a cooperation agreement with Elliott on September 5, 2022, which each required that
Elliott maintain an equity ownership threshold of 4.3% and 2.25%,
respectively.
2 Vice Chancellor Laster's opinion is accessible
here:
https://law.justia.com/cases/delaware/court-of-chancery/2024/c-a-no-2023-0309-jtl-0.html
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SOURCE Boots Capital Management, LLC