Keith Meister, CEO of Corvex Management, was a perfect gentleman when he laid out his views on telecom-provider CenturyLink (CTL) at last week's Sohn Conference.
But his prescription for the ailing company -- which the high-profile activist investor unveiled as its largest position, with a 5.5% stake -- was nonetheless a sharp change in direction. It was also exactly what some other CenturyLink investors are rightly clamoring for.
While commending the $34 billion acquisition of communications provider Level 3 Communications (LVLT) announced last year, Meister insisted that it should be Level 3 CEO Jeff Story who takes the helm of the combined business after a yearlong integration following the deal's completion, not CenturyLink CEO Glen Post as planned.
The view outlined by Meister, now CenturyLink's largest shareholder that is not an index fund, may force CenturyLink's board to reshuffle its C-suite or face a prolonged proxy war.
"Frankly, I was a little surprised Meister was so nice about it," says Forrest Wilson, an investor in CenturyLink and former equity research associate at JPMorgan Chase, where he covered CenturyLink, which has a market cap of $13.5 billion, and other telecoms. "Shaking up CenturyLink's management and board is exactly what is needed, and I'd be thrilled if Meister had a shareholder vote to force them out."
Of course, Meister may just be engaging in early-stage diplomacy: With so much riding on his plan's success, it may be easier to get what he wants without an initially confrontational posture.