Frontier Communications ticks lower as Cerberus cuts stake amid Verizon deal

Frontier Communications (NASDAQ:FYBR) edged lower by 0.6% after it was disclosed that private equity owner Cerberus reduced its stake after Verizon (VZ) agreed to buy the telecom firm for almost $10 billion.

Cerberus, the PE firm that had been one of the top five holders of Frontier (FYBR), sold more than 6 million shares of the company on Sept. 5 and Sept. 6, following Verizon’s $38.50 a share deal announcement, according to a 13D filing. Cerberus still owns 18 million shares and is among the top 10 holders of FYBR.

The Cerberus disclosure comes after an Axios report last week highlighted a lack of a voting agreement with Frontier’s PE owners Cerberus, Ares and Blackstone (BX) in the deal agreement. The fact that Verizon didn’t get an agreement may mean that the company was very confident Frontier (FYBR) holders were supportive of the deal, or Verizon tried and the investors declined.

The theory was that if the PE firms didn’t vote their shares for the transaction and basically lock it down, there’s a possibility that another party may come in with a higher bid, according to the report.