CoreLogic Dissidents Get Glass Lewis Backing to Replace Chairman
(Bloomberg) -- A second prominent shareholder advisory firm has come out in support of two investors seeking a sale of CoreLogic Inc., arguing stockholders should vote for four of their director nominees and remove the company’s chairman, Paul Folino.
Glass Lewis & Co. made its decision based on concerns around the process by which the real estate data provider has engaged with potential buyers, which it characterized as “roundly criticized and poorly reasoned,” according to a report Thursday.
It also said it had concerns about the long-tenured board and its poor record for generating shareholder returns.
“We consider the sum of available information weighs against maintenance of the status quo here,” it said.
It urged investors to elect Steve Albrecht, Wendy Lane, Ryan McKendrick, and Henry Winship from the slate of nominees nominees put forth by Cannae Holdings Inc. and Senator Investment Group. It recommended shareholders withhold their support for incumbent directors David Chatham, Thomas O’Brien and David Walker, in addition to Folino, to make room for the new directors.
The investors are seeking to replace nine directors on the company’s board.
CoreLogic said in a statement it appreciated that Glass Lewis hadn’t recommended shareholders grant the majority of the board to the investors. But it said it believed it had come to the wrong conclusion in supporting the dissidents’ four nominees.
“Our board is committed to driving shareholder value and we are actively pursuing multiple paths to maximize shareholder value, including reviewing strategic alternatives,” the company said.
Last week, advisory firm Institutional Shareholder Services Inc. recommended CoreLogic’s investors elect three directors from the dissidents slate, and urged a settlement between the parties.
The support from ISS and Glass Lewis will put pressure on both sides to reach a settlement ahead of a planned Nov. 17 meeting, where investors will vote on the matter.
“By calling for the removal of CoreLogic’s chairman as well as its longest tenured directors, Glass Lewis issued a severe rebuke of CoreLogic’s board for failing its shareholders,’ Senator partner Quentin Koffey said in a statement. “This resounding lack of confidence in CoreLogic’s current Board and its commitment to shareholder value is why electing new, fully independent, and highly qualified directors is the best path forward.”
The dispute dates back to June, when Bill Foley’s Cannae and Senator proposed acquiring CoreLogic for roughly $7 billion, including debt. CoreLogic rejected that offer, and a subsequent one for $66 a share, arguing it undervalued the company.
Since then, CoreLogic has entered talks with a consortium consisting of Warburg Pincus and GTCR, which are pursuing a deal worth $80 a share or more, according to people familiar with the matter.
Others have expressed interest in the company. That includes CoStar Group Inc., which said it was interested in pursuing a deal in the $77 to $83 a share range but has balked at the terms in the non-disclosure agreement, which it believes are too onerous, the people said.
CoStar has written a letter to CoreLogic’s board saying it would like to engage with the company after the shareholder vote on Nov. 17, people familiar with the matter said, asking not to be identified because the details aren’t public. The company has indicated it was prepared to reengage with CoStar as part of the review, they said.
A representative for CoStar declined to comment.
CoreLogic has said it is looking at multiple ways to improve value, including a possible sale, and has engaged with third parties to that end. Cannae and Senator have said they are no longer pursuing a deal, and has called on the company to run a formal sales process.
PentWater Capital Management, which owns a 2% stake in the company, raised concerns this week about the process by which CoreLogic was entertaining bids. It urged the company to run a full sales process.
“We also believe shareholders have clear cause to question the merits of vesting additional time and confidence in a long-tenured board which paradoxically claims to be ‘singularly focused on creating value’ despite tacitly abdicating themselves of responsibility for a plainly observable legacy of mediocre value creation and pervasive misses on growth, revenue mix and margins,” Glass Lewis said.
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