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CoreLogic rejects US$7 billion takeover bid from investment firms

07 Jul 2020 / 23:43 H.

BOSTON/BENGALURU: Property data and analytics company CoreLogic today rejected an unsolicited US$7 billion (RM29.9 billion) takeover offer and said business was so strong that it expected to earn more this year and would be able to buy back more of its stock.

Investment groups Cannae Holdings Inc and Senator Investment Group last month proposed to buy the company, valued at US$5.3 billion, for US$65 a share, representing a 37% price premium at the time. A spokesman for the group declined to comment.

"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," Paul Folino, CoreLogic's board chairman said in a statement. He said the board "unanimously rejected the unsolicited proposal."

Over the last few weeks, CoreLogic's shares have climbed significantly and were trading at $68.51 on Tuesday, leaving the investor groups' offer without any premium at all.

On Tuesday, CoreLogic also raised its full-year 2020 revenue forecast to between US$1.84 billion and US$1.88 billion from between US$1.69 billion and US$1.73 billion. Analysts on average expected revenue of US$1.73 billion, according to IBES data from Refinitiv.

The new financial guidance reflects market share gains and major new business wins as well as the latest estimates of housing market activity, the company said.

At the same time, CoreLogic said it had increased its share repurchase authorization to $1 billion.

The company also said it adopted a short-term shareholder rights plan, the implementation of which would prevent investors from acquiring 10% or more of the company's common stock, or 20% in the case of certain passive investors.

Cannae and Senator, which jointly hold an economic interest of roughly 15% in CoreLogic, are pursuing a different kind of activism where a hedge fund is partnering with an operating company to buy an entity and then run it, instead of just pushing management to run the business better itself.

CoreLogic is also worried about conflicts of interests.

"The proposal also fails to address the serious regulatory concerns raised by significant overlaps between CoreLogic and the network of companies associated with Cannae's chairman, (Bill Foley), including Black Knight and Fidelity National," Folino said in the statement.

Cannae Holdings and Senator Investment Group said last week they owned enough shares in the company to call a special meeting and that Bank of America was sure it could arrange financing for the deal. – Reuters

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