Frontier Communications (FYBR, Financial) is encountering resistance from its second-largest shareholder regarding a proposed sale to Verizon (VZ) for nearly $10 billion. Glendon Capital Management, which owns nearly 10% of Frontier's shares, plans to vote against the deal, labeling Verizon's offer of $38.5 per share as too low. Including acquisition-related debt, the deal's value could reach $20 billion.
The shareholder vote is scheduled for November 13, and the transaction must secure a majority of the outstanding shares to proceed. Neither Verizon nor Frontier has commented on the matter. Earlier this year, Frontier initiated a formal strategic review following pressure from activist investor Jana Partners (Trades, Portfolio), who suggested the company was undervalued. Jana pointed to Frontier's strong position in the fiber broadband sector as an attractive feature for wireless operators and private equity firms.
On the stock market, Frontier shares closed at $35.25, reflecting a $3 discount to the proposed sale price.
