Investors Senator Investment Group LP and Cannae Holdings Inc. have attacked the performance and conduct of catastrophe risk modeller CoreLogic in a letter to shareholders ahead of a meeting to decide on the future of the firm’s Board.
Senator & Cannae hope to convince shareholders to replace nine members of CoreLogic’s Board on November 18th with new directors of their choosing.
The move comes after CoreLogic twice rejected an acquisition offer from the two companies, who collectively hold a 15% stake in the modelling firm.
Since the original takeover proposal, the two sides have engaged in a vitriolic back-and-forth, with CoreLogic accusing the investors of undervaluing it in an opportunistic grab.
Senator and Cannae, on the other hand, have charged CoreLogic with ignoring the interests of its shareholders and relying on a “smokescreen” of regulatory concerns and “poison pill” defense tactics.
Now, in a letter to shareholders, they say CoreLogic’s Board has “demonstrated that it has no intention of engaging constructively” and have tried to shine a light on what they see as the company’s “decade of underperformance.”
“Despite multiple efforts at private dialogue and various ‘olive branch’ gestures, we have met nothing but resistance from CoreLogic’s Board,” Senator and Cannae wrote.
“Since we first announced our proposal to acquire CoreLogic three months ago, you have made your expectation resoundingly clear: CoreLogic should engage in good faith and promptly carry out a legitimate sales process aimed towards maximizing value for all shareholders.”
“One need look no further than the 40+% rise in the Company’s stock price since our involvement, or CoreLogic’s largest shareholder for over seven years selling their entire 17% position around our proposal price, to see that this is what shareholders want.”
The investors further noted that their latest offer represents a 39% premium to CoreLogic’s unaffected price and a 28% premium to its 52-week high, which they say are 1.8x and 2.2x greater than average premiums in the industry, respectively.
Speaking to regulatory concerns, they assured shareholders there would be “no material antitrust risk to a combination” as neither company has any overlapping business with CoreLogic. They also agreed to a provision whereby, should an antitrust issue arise, they will accept the regulatory fix and close the transaction.
Senator and Cannae go on to allege that CoreLogic has underperformed by 145% over the past 5 years and has consistently fallen short of its long-term targets.
“While we will continue to provide relevant information to shareholders, including CoreLogic’s staggering underperformance, blatantly misleading materials, and biased Board, make no mistake: we would much prefer the private and productive dialogue we have tried to achieve for the past three months,” they concluded.
“We sincerely hope we can find common ground with the current CoreLogic Board for the benefit of all shareholders. However, if we cannot, we remain committed to this transaction – whether that be a sale to us or a sale to a higher bidder – and will see this process through.”
A CoreLogic spokesperson said, “CoreLogic is delivering strong financial performance and the Board is confident that continued successful execution of our strategy will deliver shareholder value far in excess of $66 per share.”