Hedge fund activist Chris Hohn calls for shake-up of Cellnex board

Billionaire hedge fund manager Chris Hohn is attempting to oust three board members at Cellnex in order to hasten the appointment of a new chief executive amid a challenging period for Europe’s largest mobile tower company.

Hohn’s hedge fund TCI, which has a record of embarking on boardroom battles, said it had concerns about “governance” at the Spanish group, particularly surrounding the replacement of Tobias Martínez Gimeno, who stepped down as chief executive in January. He will leave the role in June.

“We believe that Cellnex is a great company, but in our opinion it cannot reach its full potential because it is held back by poor corporate governance,” Hohn wrote in a letter to the Cellnex board, seen by the Financial Times.

“We believe that the . . . hiring process for a new CEO has been mishandled by the board and resulted in insufficient progress to recruiting a suitable replacement,” he wrote as he called for the departure of chair Bertrand Kan and two directors. “As a result we have lost confidence in Bertrand Kan, Peter Shore and Alexandra Reich as effective directors.”

TCI, which owns 3 per cent of Cellnex’s share capital and a further 6 per cent in derivatives, is hoping that one of its own directors, Jonathan Amouyal, will be appointed to the board via “constructive dialogue”. However, if this is not possible, it says it will propose a vote at the company’s next AGM.

Cellnex declined to comment.

The group’s share price has fallen 20 per cent over the past 12 months, at a time when rising interest rates and high levels of debt have shaken up its acquisitive business strategy.

TCI is already involved in corporate controversy in Spain as it has been a forceful advocate of Ferrovial’s plan to shift its head office from Madrid to the Netherlands in order to facilitate the listing of its shares in New York. The infrastructure group sparked fury in the Spanish government when it announced its plan.

Earlier this year, the hedge fund also demanded that the world’s largest plane maker Airbus abandon its bid for a stake in the cyber security arm of French IT company Atos.

The last time Hohn moved against a chair however was when he called for the resignations of the chief executive and chair of Montreal-based railway group Canadian National in 2021, after the company’s failed attempt to buy Kansas City Southern.

Martínez resigned after eight years at the helm of Cellnex during which it became Spain’s largest telecoms group amid a dealmaking spree.

His announced departure came at a time of retrenchment for tower groups around the world. When debt was cheap, masts — the metal structures on which radio antennas sit — were some of the most valuable assets in telecoms, trading at high multiples and offering private investors attractive returns.

But for the past year, rapidly rising interest rates have driven up the cost of capital for these heavily indebted businesses, causing their share prices to tumble.