Jana calls for Frontier board to immediately launch review of alternatives

Jana Partners, a shareholder of Frontier Communications, made public a letter sent to Frontier’s board of directors, reiterating the “urgent need for the Board to immediately engage in a comprehensive review of strategic alternatives to maximize value for shareholders.” The letter states in part: “As we have expressed publicly and in direct conversations with the Company, we believe Frontier’s equity is grossly undervalued and that it will continue to underperform if the Board maintains the status quo. Accordingly, we are calling on the Board to immediately commence a comprehensive review of strategic avenues for shareholder value creation, including evaluating a sale transaction, a strategic partnership/joint venture, and/or the divestiture of non-core copper passings to accelerate Frontier’s transition to a pure-play fiber provider. In our view, delaying implementation of corrective actions until next year after the planned investor update reflects a lack of urgency shareholders can ill afford. Importantly, we wish for the Board to pursue whatever option generates the greatest risk-adjusted return for shareholders. Based on our discussions with potential strategic and financial buyers who have indicated interest in participating in a Company-initiated review process, we believe that a bona fide evaluation of strategic alternatives would lead the Board to conclude that a sale transaction offers the best risk-adjusted outcome for shareholders. However, this can only be determined by conducting such a review. A Board-led review of alternatives is certainly preferable to an unnecessarily distracting campaign to force this warranted action. As such, we would be highly supportive of the Board should it commit to this review.”