Australian global investment manager Cooper Investors Pty Limited has written an open letter to the board of directors at Frontier Communications, asking for the board to oppose Verizon's acquisition of the US company.
Coopers, which is a stakeholder in Frontier, said the offer from Verizon undervalues the company by between 24 and 62 percent.
Verizon announced last month that it had agreed to an all-cash acquisition of Frontier in a deal expected to be worth $20 billion.
The offer was valued at around $38.50 per share, which Cooper notes falls short of the company's overall value.
Cooper, a stakeholder in Frontier since 2021, owns approximately 800,000 of the company's shares.
In its open letter to the board, Cooper said the bid "significantly undervalues Frontier as a standalone entity and fails to adequately compensate stockholders for the anticipated synergies that would be created by the transaction."
The company said it intends to vote against the proposed transaction, urging fellow stockholders to do the same at next month's meeting on November 13.
Instead, Cooper said it believes Frontier's value is between 24 to 62 percent above the offer price, noting that Frontier does not require strategic partners to carry out its planned network build.
"Frontier should be worth $47.88 per share on a standalone basis at the time the transaction is closed, or approximately 24 percent above the current offer price," said Cooper in its letter. Cooper adds that, a modest premium of $3,000 per passing values shares at $62.18 which would be 62 percent over the current offer price.
Furthermore, Cooper argues: "Frontier does not require strategic partners. To the contrary, the company has the strategy, expertise, and access to funding to complete the planned network build to 10 million fiber passings."
Cooper isn't the only stakeholder unhappy with the offer, as Reuters reported this week that other investors including, Glendon Capital Management and Cerberus Capital Management have also deemed the offer on the table as low.
Glendon owns nearly 10 percent of Frontier, while Cerberus owns 7.3 percent of the company.
Verizon stated the deal would bolster its fiber network offering and expand its intelligent Edge network to include digital innovations like AI and IoT.
At present, Frontier provides broadband connection to around 7.2 million locations across 25 states and has 2.2 million fiber customers.
Verizon provides fiber services via its Fios offering. The company has around 18 million fiber locations across the country.
DCD has contacted Verizon for comment.
