CoreLogic disclosed it has received an unsolicited bid from a rival, two weeks after the data and analytics firm agreed to a $6 billion acquisition from two private equity firms.
CoStar Group, a provider of commercial real estate information, analytics and online marketplaces founded in 1987, is offering $95.76 per share for the data provider. That compares to an $80 per share bid CoreLogic accepted on Feb. 4 from funds managed by Stone Point Capital and Insight Partners.
CoStar Group and a private equity group led by Warburg Pincus had been rumored to be final bidders for California-based CoreLogic, but the company sealed the deal with Stone Point and Insight instead. CoreLogic said its board of directors unanimously approved the offer in what it framed as a “definitive merger agreement.”
In a statement issued Feb. 16, CoreLogic said its merger agreement with Stone Point Capital and Insight Partners “remains in full force and effect” and that CoreLogic’s board hasn’t withdrawn or modified its recommendations that stockholders vote in favor of the merger agreement as it stands.
There is a caveat, however. CoreLogic added that it will “carefully review” the new proposal working with its outside legal counsel and financial advisers to see if it would, in fact, be a superior bid. The reason: “fiduciary duties.”
Washington-based CoStar Group released its letter to CoreLogic board members detailing its offer and overall argument to switch acquirers. In it, CoStar CEO Andrew Florance noted it has been talking with CoreLogic executives since late 2020.
“Given our substantial engagement since early December, we were stunned to read about the acquisition of CoreLogic by Stone Point Capital and Insight Partners,” Florance wrote. “The decision to accept the lower $80 per share bid…indicates a failure to appropriately value the synergies of our proposal as a strategic bidder.”
Florance argued the bid CoreLogic accepted doesn’t maximize value for CoreLogic shareholders. At the same time, he said CoStar continues “to believe in the strong strategic rational for the combination of our two companies.”
“In CoStar Group’s proposed acquisition of CoreLogic, the result would be a company with a rock-solid balance sheet with strong cash flow for investment, innovation, competition and growth,” Florance said. “CoreLogic’s employees, clients, communities and our combined shareholders would benefit from a strong future for the combined company.”
CoStar’s bid involves, in part, issuing CoreLogic shareholders 0.1019 shares of CoStar Group common stock in exchange for each share of CoreLogic common stock.
Stone Point and Insight Partners would finance their acquisition through a combination of committed equity and debt financing.
Sources: CoreLogic, CoStar Group