Citizens Communications Co. executive Leonard Tow said he would resign immediately as CEO and would step down as chairman of the telecommunications company by the end of the year.
Tow -- who had been head of cable MSO Century Communications Corp. before he sold it to Adelphia Communications Corp. in 1999 for $5.2 billion in stock and assumed debt -- had headed up Citizens for about 14 years.
Citizens said current director and former president and chief operating officer Rudy Graf will return as president and CEO on an interim basis.
Citizens has formed a search committee for a new chief executive, consisting of Graf and other board members Robert Stanger and David Ward. The company also intends to engage an executive-search firm to identify qualified candidates to fill the role of CEO.
“The board and I have come to the conclusion that after 14 years as CEO, it is the right time for me to step down,” Tow said in a prepared statement. “I have been privileged to work with some of the most talented and dedicated people in the business here at Citizens, and I look forward to many more years of success for the company.”
Tow will assist Graf in the transition.
Citizens also said it would issue a special $2-per-share dividend to shareholders, as well as instituting a regular annual dividend of $1 per common share that will be payable quarterly.
The news sent Citizens’ stock to a new 52-week high Monday. Shares were trading as high as $14.25 each before falling back to $13.90 in afternoon trading. The stock’s previous 52-week high was $13.54 per share.
Tow re-entered the cable spotlight briefly in 2002 after an accounting scandal bankrupted Adelphia. He was one of Adelphia’s largest shareholders outside of the Rigas family, controlling about 27 million shares. Those shares are now worth a fraction of their original value.
Tow and former Citizens president and COO Scott Schneider, who resigned last year, served for a brief period as directors of Adelphia in 2002. And Tow heads up the official committee of equity-securities holders of Adelphia.