Eight and a Half Billion for Frontier? Discontent Among Investors Over Verizon's Acquisition Plans

The announced takeover offer by Verizon Communications is currently causing unrest among the largest investors of Frontier Communications. In particular, Glendon Capital Management, the second-largest investor with nearly 10% stake in the company, plans to oppose the $9.6 billion deal. The reason: Verizon's offer of $38.50 per share is considered insufficient. Including debt, the total value of the deal amounts to approximately $20 billion. Approval requires a majority of the outstanding shares at a shareholders' meeting on November 13. Additionally, Cerberus Capital Management, which holds 7.3% of Frontier, internally criticized the purchase price. However, it remains unclear whether Cerberus will vote against it. Both Verizon and Frontier have not yet commented. Insider information indicates that the takeover announcement resulted in a 44% premium on the 90-day weighted average price. Verizon's CEO Hans Vestberg described the acquisition as "strategically valuable" to enhance competitiveness. The full completion, however, could take up to 18 months. Frontier's stock closed at $35.25 on Monday, more than $3 below Verizon's offer. Particularly concerning competition, the deal strengthens Verizon's position against rivals like AT&T and T-Mobile. Analysts from New Street Research are even calling for a higher offer, as Frontier's assets could gain value in the future. Ares Management, the largest investor in Frontier with a 15.6% stake, has not publicly commented on its voting intentions.