HOUSTON - Ted B. Miller, the founder of Crown Castle Inc. (NYSE: NYSE:CCI), has nominated four individuals to the company's board of directors with a detailed plan aimed at restructuring the company's operations and improving shareholder value. Miller's proposal includes selling off Crown Castle's fiber assets, optimizing operational efficiency, and aligning the company's strategic focus with its tower business.
Miller's strategy proposes to increase Crown Castle's Adjusted Funds From Operations (AFFO) after discretionary CapEx to $2.2 billion by 2025, and improve EBITDA margin per tower from 70% to a range of 75-80%, which would be in line with industry peers such as American Tower (NYSE:AMT) and SBA Communications (NASDAQ:SBAC). Additionally, the plan suggests an annual interest cost savings of $330 million, which exceeds the expected churn costs from the expiring Sprint contract.
The proposed plan also includes a share price target of $150-$160 based on 2026 Ebitda projections. Miller and his co-investors have a combined economic position of $100 million in Crown Castle.
Miller criticizes the current board for what he describes as a lack of leadership, expertise, vision, and urgency. He emphasizes the need for a highly sustainable dividend policy to build long-term value for shareholders. Miller's letter to the Crown Castle Chairman, P. Robert Bartolo, expresses his commitment to restoring operational excellence and shareholder confidence.
The press release also highlights Miller's concerns regarding Crown Castle's agreement with Elliott Management and urges a shareholder vote on the matter. Miller and his nominees advocate for a pure-play US TowerCo model, divesting from non-core fiber assets, and leveraging technology to enhance operational efficiency.
The information presented is based on a press release statement from Miller and his investment vehicle, Boots Capital Management.
InvestingPro Insights
Amidst the strategic restructuring proposed by Ted B. Miller for Crown Castle Inc. (NYSE: CCI), investors are closely monitoring the company's financial health and market performance. According to InvestingPro, Crown Castle's market capitalization stands at a robust $46.93 billion, reflecting investor confidence in the company's market position. The company boasts a high Price / Book multiple of 7.36 as of the last twelve months ending Q4 2023, indicating a premium valuation that investors are willing to pay for its equity compared to its book value.
Despite some analysts revising their earnings estimates downwards, an InvestingPro Tip suggests that Crown Castle has been profitable over the last twelve months, with a reported operating income of $2.488 billion and a gross profit margin of 71.64%. This profitability aligns with Miller's focus on operational efficiency and EBITDA margin improvements. Moreover, the company has demonstrated a commitment to shareholder returns, having raised its dividend for 10 consecutive years, with a current dividend yield of 5.78%.
For investors seeking further insights and additional InvestingPro Tips for Crown Castle Inc., there are 6 more tips available that could provide a deeper understanding of the company's financial nuances and future outlook. To access these tips and enhance investment strategies, use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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