Frontier(FYBR.US) is planning to "sell itself" to Verizon(VZ.US) and may face opposition from its second-largest shareholder.
Frontier Communications' second-largest shareholder is planning to vote against the company's proposed $9.8 billion sale to Verizon, according to a report. Glendon Capital Management, which owns nearly 10% of Frontier, is opposed to the deal because it believes Verizon's $38.50 per share offer is too low, according to people familiar with the matter. The transaction, which would include debt, is valued at $20 billion, the people said. The investor plans to vote against the deal at Frontier's annual meeting on Nov. 13, the people said. The deal needs the approval of a majority of the company's outstanding shares. Verizon and Frontier declined to comment. In February, Frontier said it was executing a formal strategic evaluation process. Earlier, activist investor Jana Partners had called for an immediate strategic evaluation and possible sale of the company. Jana believed Frontier was undervalued and its strong position in fiber broadband would make it attractive to wireless carriers and private equity firms. Frontier shares closed at $35.25 on Monday, $3 below the proposed deal price.