CoreLogic’s Board has unanimously rejected an unsolicited bid from an investment firm and hedge fund, calling it undervalued and not in the best interest of shareholders.
The action is in 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. Additionally, CoreLogic – a data analytics firm focused in part on insurance – took steps to shore up its independence by boosting a share buyback plan and adopting a short-term shareholder rights plan.
CoreLogic Chairman of the Board Paul Folino explained that the company is still keeping its options open, even as it uncategorically 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.”
Folino added 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.”
For now, Folino said, the company 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 lead the board to increase CoreLogic’s share buyback to $1 billion, above and beyond the company’s recent quarterly dividend.
As well, CoreLogic has adopted a short-term shareholder rights plan. The 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).
The arrangement includes such person’s or group’s ownership of derivative instruments, and any such person or group who exceeds the applicable threshold as of adoption of the plan is grandfathered from triggering the plan until they become the beneficial owner of any additional shares of CoreLogic common stock or derivative instruments, as further detailed in the rights plan.
If the rights become exercisable, each right (other than rights held by the acquirer and related parties triggering the plan) will entitle the holder to purchase a number of shares of CoreLogic’s common stock with a market value that equals twice the exercise price of the right, CoreLogic said.