Highlights
- Johnson Fistel, LLP is investigating whether the board members of Frontier Communications Parent, Inc. breached their fiduciary duties in relation to the proposed $20 billion merger with Verizon Communications Inc.
- Approximately 63% of Frontier Communications shareholders approved the merger agreement with Verizon, but ten of the company’s twelve largest shareholders voted against it, claiming the deal “significantly undervalues” Frontier.
- The transaction is anticipated to close by the first quarter of 2026, pending necessary regulatory approvals and customary closing conditions.
Johnson Fistel, LLP is investigating the proposed $20 billion deal to determine whether Frontier Communications Parent, Inc.’s board members breached their fiduciary duties in connection with the proposed merger with Verizon Communications Inc.
On November 13, 2024, Frontier Communications shareholders at its special meeting approved the merger agreement with Verizon with approximately 63% of stockholders voting in favor of the merger.
According to the law firm, ten of Frontier’s twelve largest shareholders voted against approving the merger, mainly because they complained that it “significantly undervalued” Frontier. “Approximately 63% of stockholders voted “For” the merger agreement proposal, with 10 of the company’s top 12 stockholders voting to approve the transaction,” Frontier Communications said in a press release on the date of shareholders approving acquisition plans.
The transaction is expected to close by the first quarter of 2026, subject to receipt of certain regulatory approvals and other customary closing conditions.
The law firm relied on the statement made by Cooper Investors PTY Limited, which owns 800,000 shares, that the merger “significantly undervalues” Frontier and “fails to adequately compensate stockholders for the anticipated synergies that would be created by the transaction,” and believes Frontier’s “standalone value is 24-62% above the offer price.”
They have also relied on a statement by a New Street Research analyst highlighting that Verizon could “comfortably pay at least $67 and still create value for its shareholders.”
The investigation focuses on whether Frontier Communications’ board failed to satisfy its duties to the Company shareholders, including whether the board adequately pursued alternatives to the acquisition and obtained the best price possible for Frontier Communications shareholders.
The decision of Frontier to acquire Verizon was made public on September 5, 2024. Frontier announced that they have entered into a definitive agreement for Verizon to acquire Frontier in an all-cash transaction valued at $20 billion.
Centerview Partners LLC and Morgan Stanley & Co. LLC acted as financial advisors to Verizon and Debevoise & Plimpton LLP acted as legal counsel.
PJT Partners served as financial advisor to the Strategic Review Committee of the Board of Directors of Frontier, and Barclays served as financial advisor to Frontier.
Cravath, Swaine & Moore LLP served as legal advisor to Frontier, and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor to the Strategic Review Committee of the Board of Directors of Frontier.
Johnson Fistel is a San Diego-based law firm in California, United States.
