Johnson Fistel is looking into the proposed $20 billion deal to determine if the merger “significantly undervalued” Frontier.
According to the law firm, ten of Frontier’s twelve largest shareholders voted against approving the merger, complaining that Frontier was dramatically undervalued, with one shareholder suggesting Frontier's standalone value is “24-62% above the offer price”.
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Around 63% of Frontier stockholders voted in favour of the takeover, announced back in September.
Johnson Fistel, however, is looking into whether the transaction provides fair value for Frontier shareholders.
The law firm identifies Cooper Investors PTY Limited as one of the dissatisfied shareholders. This company holds 800,000 shares in Frontier but contends that the proposed merger “fails to adequately compensate stockholders for the expected synergies that would arise from the transaction”.
The law firm cited a New Street Research analyst who stated that Verizon could "comfortably pay at least $67 and still create value for its shareholders" — 1.74 times the $38.50 shareholders currently stand to receive.
Johnson Fistel is seeking information from individuals with knowledge of the potential sale to reach out to assist in its investigation or use the SEC Whistleblower programme.
Capacity has reached both Frontier and Verizon for comment.
