Both CoreLogic Inc. and the activist investors have sent competing letters to shareholders in recent weeks. Here are some edited highlights:
Senator/Cannae:
• Our offer represents … a 26% premium to the Company’s 52-week high, 2.0x greater than average premiums in this industry. When accounting for the company’s track record of growth or when compared to multiples where the company has historically traded, the offer represents an EBITDA multiple well in excess of average transaction multiples in the industry.
• We have committed to signing a ‘Hell or High Water’ provision which means no matter what antitrust issue may arise, we are required to accept the regulatory fix and close the transaction.
• Bill Foley is a uniquely qualified buyer … Under Bill Foley’s leadership, we would seek to reignite long-term growth at CoreLogic, increase operating efficiency, and improve overall allocation of scarce capital resources. Bill Foley has extensive experience transforming similar businesses … He is therefore not only a credible buyer, but also is the best buyer for the company.
• [CoreLogic] issued shares to dilute our ownership below the 10% threshold necessary for calling a Special Meeting.
• [CoreLogic] adopted a poison pill designed to delay our ability to call a Special Meeting … we must now call a Special Meeting through a time consuming and costly formal public solicitation process.
• [CoreLogic is] actively inviting regulatory scrutiny in an attempt to impede a transaction. We know this is nothing more than a smokescreen.
• Turning every private communication into an opportunity for press releases and “spin”: Despite our multiple requests for constructive private communication, the Company has issued a press release immediately following each private discussion we have had or private letter we have sent.
CoreLogic:
• The proposal valued CoreLogic at ~13x our previous FY 2020 guidance from February. If you apply 13x to our most recent earnings guidance, which has increased 15% since they announced their proposal, our implied stock price is far in excess of $65.
• The Foley network is well aware of the continuing strength of the mortgage market. Foley-affiliated Black Knight recently predicted a potential $6.5 trillion refinancing opportunity, which equals 4+ years of backlog.
• We asked for their committed sources of equity, which they refused.
• $65 does not entitle Cannae to see highly-sensitive competitive information—we must protect our business and our shareholders.
• Any investor—and especially Foley and Cannae with all their tentacles in the industry—can refine their views on value based on all that we have publicly disclosed.
• The FTC reached out to CoreLogic without our prompting and launched an investigation—the FTC contacted us, not vice versa.
• They say CoreLogic issued shares as a tactic to prevent them from reaching the 10% threshold to call a special meeting but ~47,000 increase in share count (less than a 0.06% increase) resulted from ordinary course issuances under employee plans at levels consistent with prior periods.
• Senator/Cannae’s ability to exercise forward purchase contracts they already hold appears to be restricted as a result of the antitrust scrutiny.
• CoreLogic did not have a shareholder rights plan, but adopted a short-term plan only after it became aware of Senator/Cannae’s rapid stealth accumulation—to protect shareholders from Senator/Cannae taking over CoreLogic without paying appropriate value
—Peter J. Brennan
