The board of data analytics firm CoreLogic yesterday unanimously rejected an acquisition offer from an investment firm and hedge fund, calling the unsolicited bid undervalued. CoreLogic added that it would be willing to meet with the two firms behind the offer.
The action was a response to a June 26 cash offer from Cannae Holdings and Senator Investment Group to acquire the company for $65 per share, or about $7 billion.
Cannae and Senator, which jointly control 15% of the company, said the CoreLogic board rejected their proposal “without any sign of seriously considering it” and without any response to their “multiple requests for a meeting.” Claiming shareholder support, they vowed to call a special shareholders meeting to replace the board.
CoreLogic Chairman Paul Folino said that the company is still keeping its options open, even as it rejected the unsolicited bid from Cannae, an investment firm, and Senator, a hedge fund.
“Our Board is open to all viable paths to increasing shareholder value, and we are willing to meet with Senator and Cannae,” Folino said in prepared remarks. “But given CoreLogic’s strong momentum, increasing margins, accelerating growth, and multi-faceted value-creation model, we are unanimous in our belief that CoreLogic will be able to deliver significantly more value to shareholders than this opportunistic proposal.”
Irvine, Calif.-based CoreLogic’s stock price was up 3.29% to $68.67 at close on July 7.
CoreLogic – a data analytics firm for the real estate, mortgage and insurance industries – also took steps to shore up its independence by boosting a share buyback plan and adopting a short-term shareholder rights plan.
Folino further claimed that the Senator/Cannae offer “also fails to address the serious regulatory concerns raised by significant overlaps between CoreLogic and the network of companies associated with Cannae’s Chairman, including Black Knight and Fidelity National.”
Cannae and its affiliates are led by William P. Foley. Among Foley’s companies are Fidelity National Financial, a provider of title insurance and transaction services to the real estate and mortgage industries; Fidelity National Information Services, a financial technology processing company; and Black Knight, which sells software, data, and analytics on homeownership. In February 2019, Cannae acquired Dun & Bradstreet, a commercial data and analytics company,
Folino said CoreLogic has benefited from an ongoing “strategic realignment” with new customers and ongoing growth in revenues and market share.
CoreLogic hiked its revenue guidance to between $1.84 and $1.88 billion for 2020, up from previous guidance of $1.69 billion to $1.7 billion. The increase would translate to estimated earnings per share for the year between $3.40 and $3.60, up from between $2.80 and $3.00.
The company said confidence in its business outlook led the board to increase CoreLogic’s share buyback to $1 billion, above and beyond the company’s recent quarterly dividend.
The new short-term shareholder rights plan calls for CoreLogic to distribute to its stockholders a dividend of one right for each share of its common stock held as of the close of business on July 17, 2020. Each right is attached to and trades with the associated share of common stock. The rights will generally be exercisable only if a person or group acquires beneficial ownership of 10 percent or more of CoreLogic’s common stock (or 20 percent in the case of certain passive investors).
Cannae and Senator said they enjoy “widespread support” from shareholders. They said their offer represents a “compelling 37% premium above the unaffected price” and it has helped boost trading in the shares.
The two investment firms said that if CoreLogic “elects to ignore its shareholders and instead continues with its current course of action,” they will call a special meeting to replace the board as early as July 28.
Cannae and Senator accused CoreLogic’s board of hiring defense advisory firms weeks ago and taking other defensive steps despite public statements that they had no knowledge of their interest,
They called the company’s newly issued multi-year guidance “wildly optimistic” after “years of poor organic growth” and said CoreLogic’s references to “regulatory” concerns and “business overlaps” were “nothing more than misdirection” They said that they reviewed potential regulatory and antitrust matters prior to making their proposal and do not believe there are material hurdles to consummating a transaction but they are willing to sign an acquisition agreement to address those concerns.
For the first quarter of this year, CoreLogic reported revenues of $444 million, up $26 million or 6%, and operating income from continuing operations of $67 million, up 216%. Net income from continuing operations came in at $34 million, up $32 million.
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