Large FairPoint shareholder asks for board seat, director resignations
A shareholder that holds a 7.5 percent stake in a Charlotte-based communications firm has asked for a board seat and the resignation of four board members.
New York-based Maglan Capital LP sent a letter last week to the board of FairPoint Communications Inc. saying that it doesn’t believe the company has tried to boost its stock price, and that the stock price trades at a discount to other communications companies.
“In recent days, the Company’s share-price has collapsed, and the Board has remained entirely complacent, despite our recommendations and demands,” said Maglan Capital chief investment office Steven Azarbad in the letter. “We find the lack of insider buying in the face of such a dramatic share-price decline extremely troubling and indicative of a complacent Board that is misaligned with the interests of shareholders.”
A FairPoint spokeswoman said the company’s board takes its “fiduciary duties and input from its shareholders very seriously,” adding it will continue to have dialogue with Maglan and other investors.
Maglan also called for the company to seek strategic alternatives, and it asked four board members – Dennis Austin, Michael Mahoney, David Treadwell and Wayne Wilson – to resign. It noted those shareholders have not purchased any FairPoint stock in the past three years.
Maglan also asked for the company to call for a special shareholders’ meeting.
“As we have consistently stated, change is needed now,” the letter stated. “We believe there are other shareholders of FairPoint who would support our efforts to call a special meeting to realize value for shareholders.”
Maglan, the Observer has reported, sent a letter in June, suggesting Fairpoint consider selling itself, among other options, saying FairPoint has failed to maximize shareholder value.
FairPoint operates more than 21,000 miles of fiber cable in 17 states, and it had $859.5 million in revenue in 2015.
FairPoint closed up about 1 percent at $13.72 on Monday. The stock closed at $16.21 as recently as July 26.
This story is from the North Carolina Business News Wire, a service of UNC-Chapel Hill’s School of Media and Journalism. The Observer contributed.
This story was originally published August 22, 2016 at 1:30 PM with the headline "Large FairPoint shareholder asks for board seat, director resignations."