Cannae launches CoreLogic proxy fight

Housing data firm rebuffed $7 billion buyout offer.

  • By Mark Basch
  • | 5:10 a.m. August 6, 2020
  • | 5 Free Articles Remaining!
Irvine, California-based CoreLogic Inc. rejected a $65-a-share offer from Cannae Holdings that was 37% higher than the stock’s previous price.
Irvine, California-based CoreLogic Inc. rejected a $65-a-share offer from Cannae Holdings that was 37% higher than the stock’s previous price.
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After CoreLogic Inc. rejected their $7 billion buyout bid, Cannae Holdings Inc. and an investment partner last week called for a special meeting to replace nine directors on CoreLogic’s 12-member board.

Cannae, the investment firm spun off from Jacksonville-based Fidelity National Financial Inc., and Senator Investment Group made the unsolicited offer to buy the housing market data firm in June. 

They offered $65 a share, a 37% premium to the stock’s previous price. But CoreLogic’s board rejected the proposal.

Cannae and Senator sent a letter to CoreLogic shareholders July 29 saying they want a special meeting to vote on its slate of nine directors who are not affiliated with Cannae or Senator.

“We will seek to replace a majority, but not the entirety, of the Board,” the letter said.

“This will not be a vote to sell the Company to us for $65 per share. Rather, it will be a vote to put in place these nine independent directors who will act in the best interest of all shareholders.”

CoreLogic responded with a news release saying its board does not think the offer is in the best interest of shareholders.

“The Board continues to believe Senator and Cannae’s proposal significantly fails to provide appropriate value to our shareholders and does not reflect our strong multi-year outlook for the business,” Chairman Paul Folino said in the release.

“Our Board is unanimous and highly confident in its belief that CoreLogic will be able to deliver significantly more value to shareholders than this opportunistic proposal,” he said.

CoreLogic’s stock has been trading above $65 and as high as $69.87 since the offer was announced, indicating Wall Street expects a higher price to come in from Cannae and Senator or another bidder.

Foley likened to Hunter Harrison

The Cannae and Senator letter also touted the deal-making experience of Fidelity and Cannae Chairman Bill Foley as a reason for CoreLogic shareholders to sell.

“Bill Foley has extensive experience transforming similar businesses and is uniquely positioned to strengthen the Company’s customer, financial, and employee relationships,” it said.

“He is therefore not only a credible buyer, but also is the best buyer for the Company.”

In a column about the CoreLogic deal on CNBC’s website over the weekend, activist fund manager Kenneth Squire compared Foley with another executive familiar to Jacksonville.

“In this situation, assuming that Bill Foley is the ‘Hunter Harrison’ of this industry and the best guy to turn around CoreLogic, Senator is asking shareholders to forego the tremendous upside of a successful turnaround for the certainty of a 37% return today,” Squire said.

Harrison in March 2017 teamed with an activist hedge fund to overhaul CSX Corp.’s top management.

Harrison became chief executive of CSX and began an overhaul of the railroad’s operations. 

He died in December 2017 but the company has continued on the path he started, and most analysts say CSX’s operations have improved.

Patriot earnings up with expense cuts

Patriot Transportation Holding Inc. had a sharp drop in revenue for the third quarter ended June 30, as the COVID-19 pandemic reduced the trucking company’s shipments.

However, because of cost cuts, Patriot’s earnings rose by 5 cents a share in the quarter to 17 cents.

Revenue dropped 31% to $19 million.

Patriot said positive insurance results and gains from equipment sales helped earnings, but it also cut labor costs.

“During March and through the third quarter, we reduced the hours of our hourly staff including mechanics, reduced the days worked by our drivers and furloughed 48 of our senior drivers, all of which returned to work when business volumes increased,” CEO Rob Sandlin said in the company’s conference call last week.

“We also made a number of permanent layoffs of hourly and salaried staff,” he said.

He did not give details about the layoffs. But Chief Financial Officer Matt McNulty told the Daily Record it involved less than a dozen people and was in part due to a planned reorganization unrelated to the pandemic.

Patriot, which transports fuel and other freight in the Southeastern U.S, reported 761 employees at the end of fiscal 2019.

Advanced Disposal earnings rise

Ponte Vedra-based Advanced Disposal Services last week also reported higher profits despite a drop in revenue, in what could be the company’s final quarterly report before a buyout by Waste Management Inc. is completed.

Advanced Disposal reported adjusted earnings of 19 cents a share for the second quarter, 9 cents higher than last year, despite a 9.2% decrease in revenue to $380.3 million.

The company has not held a quarterly conference call to discuss its results since it agreed to the buyout in April 2019.

Completion of the deal has been delayed by antitrust reviews of the merger of two waste services companies. However, Waste Management said last week as it reported quarterly earnings it expects the deal will be completed by the end of the third quarter.

Waste Management in June announced an $835 million deal to sell some assets to GFL Environmental Inc. Although the U.S. Justice Department has still not approved the deal, the companies hope that sale will satisfy antitrust issues.

The companies also announced a lower buyout price after the long delay. After originally agreeing to buy the company for $33.15 per Advanced Disposal share, Waste Management now will pay $30.30.

Advanced Disposal has scheduled a special shareholders meeting for Aug. 25 to approve the lower price.

Ameris Bancorp earnings drop

Ameris Bancorp last week reported adjusted second-quarter earnings of 61 cents a share, down from 96 cents the previous year.

The company said an increased provision for credit losses and higher salaries and employee benefit expenses caused the drop in earnings.

Ameris last year moved its executive office from Jacksonville to Atlanta.

St. Joe revenue, earnings increase

The St. Joe Co., another company formerly headquartered in Jacksonville, reported second-quarter earnings rose by 16 cents a share to 33 cents, with revenue increasing 2% to $36.1 million.

The real estate development company said revenue in its hospitality division declined because of the pandemic, but revenue grew in its other businesses.

“As we navigate the uncertainty caused by the pandemic, we are seeing positive momentum in all operating segments through the second quarter,” CEO Jorge Gonzalez said in a news release.

St. Joe, which was established in Jacksonville in 1936, moved its headquarters to the Florida Panhandle in 2010 to be closer to its developments and now is based in Panama City Beach.

ADT jumps on Google partnership

ADT Inc.’s stock jumped higher Aug. 3 after the home security company announced a partnership with Google LLC.

Google is investing $450 million in ADT and also will offer Google hardware and services in ADT’s home security systems.

Google will own 6.6% of ADT’s stock after the deal is completed, which is expected in the third quarter this year.

ADT is controlled by Apollo Funds, which acquired the company in May 2016 and still owns 84.6% after ADT went public again in January 2018.

ADT’s stock had traded below its initial public offering price of $14 a share since it went public, but it doubled in price to $17.21 Monday morning after the Google deal was announced.

It fell back and closed at $13.48, up $4.87 for the day.

Boca Raton-based ADT employed about 3,000 people in Jacksonville at the time of its IPO.



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