Delayed Agreement: Resistance to Verizon's Acquisition Offer for Frontier Communications

The planned acquisition of Frontier Communications by Verizon Communications, valued at $9.6 billion, is facing concerns from some significant Frontier shareholders. In particular, Glendon Capital Management, which holds nearly 10% of Frontier's shares, announced its intention to vote against the purchase offer of $38.50 per share, deeming it too low. Including existing debt, the total value of the transaction amounts to approximately $20 billion. Cerberus Capital Management, which owns 7.3% of Frontier, also views the acquisition price skeptically, considering it a massive undervaluation of the company. However, it remains unclear whether Cerberus is willing to vote against the offer, as the firm has not yet made further comments. Verizon and Frontier have not yet responded to requests for comment. The acquisition offer, announced last month, implies a 44% premium on Frontier's 90-day volume-weighted average stock price. Verizon CEO Hans Vestberg views the deal as strategically advantageous to be more competitive in new markets. Nevertheless, Frontier's stock was recently trading at $35.25, below the offer price. The upcoming shareholder vote on November 13 must achieve a majority of eligible shares in order for the acquisition to proceed. Experts and analysts, including Jonathan Chaplin from New Street Research, are recommending investors push for a higher offer since Frontier's assets could increase in value in the future. Frontier's largest shareholder, Ares Management, has also not yet commented on its voting intentions.