Shareholder shake-up: Elliott boasts USD3.2bn stake in AT&T, plots overhaul

10 Sep 2019

Self-styled ‘activist investor’ Elliott Management Corporation has announced that it now manages funds that collectively beneficially own USD3.2 billion worth of shares in AT&T Inc and has published an open letter to the telco, outlining what it describes as ‘a compelling value-creation opportunity at AT&T’. The letter, addressed to the company’s board, suggests that the opportunity could lead AT&T to a per share value of over USD60 by the end of 2021, representing a 65%+ upside to today’s share price. According to the document, Elliott made the investment in AT&T – among its largest ever – ‘because it exhibits a unique combination of historical underperformance, a depressed valuation, well-positioned assets and a clear path forward to generate extraordinary value for shareholders and other stakeholders’. The letter concludes by calling for ‘constructive engagement’ on a mutually agreed-upon plan to realise this opportunity for all AT&T stakeholders.

While the development is undoubtedly significant, according to CNN the stake accumulated by Elliott represents just over 1% of the company’s total shares and ranks the firm as the telco’s sixth-largest institutional investor. The broadcaster notes that mutual funds Vanguard, BlackRock and State Street – which do not tend to take activist stakes – are the three largest owners of AT&T. Those three entities collectively hold more than 16% of AT&T’s outstanding shares.

TeleGeography notes that Elliott is well known in the telecoms industry as a result of its long-running fight for management control at Telecom Italia (TIM). The boardroom battle has pitted Elliott against French media firm Vivendi in a tussle for control of the Italian telco.

United States, AT&T, Elliott Management