Boots gives Crown Castle another kicking

The investor has outlined numerous grievances against Crown Castle in recent weeks and months, but their dispute essentially boils down to two things: the sale of the towers company's fibre network business and the fact that shareholders are not getting the returns they had hoped for. And the two elements are of course intrinsically linked.

Accusations of poor management and lack of strategy have dogged Crown Castle for some time. It lost its chief executive Jay Brown at the back end of last year after relentless pressure from activist investor Elliott Investment Management, which called for a replacement of the management and board, and a strategic re-think, including a sale of the fibre business.

But Elliott was not the only angry investor. Crown Castle co-founder and one-time CEO Ted Miller has been on the offensive since last summer, his Boots Capital investment vehicle undertaking a thorough – it claims – analysis of the potential divestment of the fibre operations. Apparently, Crown Castle's board declined to look at it.

A month ago Crown Castle unveiled Steven Moskowitz as its new president and CEO. Moskowitz most recently served as CEO of Centennial Towers, a Latin America-focused infrastructure company, and prior to that led NextG Networks, which was acquired by Crown Castle just over a decade ago. He has also held executive position at Crown Castle's arch-rival American Tower.

Also last month, Crown Castle shared that it has "made significant progress" in its strategic review of its fibre assets – sale or retention is still very much on the cards – and that seemed to tip Boots Capital over the edge.

There was a spat over board composition, because the appointment of Moskowitz pushed the number of Crown Castle directors up to 13. Crown Castle claimed Boots Capital was trying to take control of its board by blocking Moskowitz's arrival, while Boots insists it merely wanted another director to step down to make way for the new CEO. As it stands, Crown Castle has a new leader who does not sit on its board.

There has been far too much mud-slinging between Crown Castle and Boots Capital to be able to summarise all of it, but in a nutshell, each has repeatedly accused the other of spreading lies and misinformation.

So it was in Boots Capital's latest missive, published on Monday. As well as outlining the various falsehoods – in its opinion – in Crown Castle's investor presentation, it once again stated its position on the towers company's performance and strategy in recent years.

"In our view, Crown Castle's Board is more focused on words than actions and has put forth no credible plan to reverse years of underperformance while shareholders have been left to suffer," the statement reads. It's a lot like that published by Elliot less than six months ago.

"Despite the Board's repeated focus on its "refresh" as evidence of positive change, Crown Castle's share performance has only worsened since its 2020 board turnover, while its direct peers, AMT (American Tower) and SBAC (SBA Communications), have seen relative TSR (total shareholder returns) of 542% and 153%, respectively, over that period," the Boots statement adds.

"The fact is that despite agreeing to review fiber after attacks from Elliott beginning in 2020, the Board has continued to make the wrong decisions," Boots Capital states, claiming that Crown Castle has neglected its core towers business while ploughing capital into fibre – $4.4 billion since the end of 2019, with a further $1.4 billion earmarked for 2024.

"Shareholders should never confuse window dressing with results," Boots declared, clearly referring to the many declarations of change and progress that have come from Crown Castle in recent weeks.

The towerco's response on Tuesday was in a similar vein, highlighting the "refreshment process" at board level that will – it believes – see it through the next chapter.

Crown Castle and Boots Capital are both touting for shareholder votes at the company's upcoming shareholder meeting on 22 May, each seeking support for its own slate of directors. That meeting should provide some closure to this most recent round of bickering, but with the two sides still far apart in terms of strategy, there is no chance of them buddying up in a fortnight's time, particularly with the sale – or otherwise – of the fibre business still up in the air.