Frontier Comm holders should vote to abstain from Verizon vote, proxy advisers say

Influential proxy advisers ISS and Glass Lewis both recommend that shareholders of Frontier Communications (NASDAQ:FYBR) abstain from voting on its planned $10 billion sale to Verizon (VZ).

Frontier (FYBR) said it disagrees with the proxy advisers’ recommendation and that the abstention from voting is “effectively a vote against” the deal, the telecom company said in a statement on Thursday.

Frontier (FYBR) explained that if the deal is voted down by holders at the special meeting on Wednesday, the $38.50 a share deal may be terminated by either Verizon (VZ) or Frontier without penalty. If Frontier holders decline to approve the deal, Frontier will return to its standalone plan.

Some large Frontier (FYBR) holders have expressed their belief that the Verizon (VZ) deal undervalues the company. Glendon Capital has said it plans to vote against the deal/ Frontier (FYBR) holder, Carronade Capital Management, said it plans to vote against the deal and believes that FYBR has an intrinsic value of at least $48.60 per share.

On Monday, CNBC’s David Faber reported that Verizon (VZ) won’t raise its bid for Frontier (FYBR).

“There is no way they are raising their bid,” Faber said on the business network, citing people familiar with Verizon’s thinking. “They are going into the vote. They fully expect they are going to get it. They will go into this vote fully expecting they will prevail.”