A trio of candidates nominated to the board of Santa Ana-based CoreLogic Inc. by its largest independent shareholder includes at least one who appears determined to replace the data provider’s chief executive and another who has had run-ins with its predecessor company.
Boston-based Highfields Capital Management LP, which owns about 7.7% of CoreLogic’s shares, last week announced its recommendations for the board of CoreLogic, which specializes in data for the real estate and mortgage industries.
CoreLogic’s board now counts seven members, but the company announced plans in March to bump that number up to nine. The additions are being made in part to appease Highfields, which has questioned the company’s strategy and management in recent months.
The hedge fund’s nominees are Barry Baker, a managing director of Boston-based private equity firm BV Investment Partners; Glenn Christenson, a managing director of Las Vegas-based Velstand Investments LLC; and Farhad Nanji, a managing director at Highfields.
“It is our hope that the availability of numerous high-quality candidates leads you to make the meaningful board changes that are necessary to achieve the company’s full potential,” Highfields officials wrote in a letter to CoreLogic Chairman D. Van Skilling.
The letter said Highfields hopes a contested election of directors will “prove unnecessary.”
If any one of the three Highfields-approved candidates make it onto the board, change would appear more likely at CoreLogic, whose shares are up about 30% for the year. The company now counts a market value of about $1.8 billion.
Call for Ouster
Nanji has previously called for the ouster of Chief Executive Anand Nallathambi, whom the hedge fund holds accountable for what it believes are less-than-stellar earnings and underperforming stock performance since the company was spun off from First American Corp. in 2010.
“We have no faith in the management team or this board to hold the management team accountable,” Nanji told media outlets in February. “Two years have gone by, the company and its shares have underperformed, and he’s not been held accountable.”
Nallathambi has given no sign he plans to step down.
“We are delivering on our plans and financial target,” Nallathambi said late last month in the company’s quarterly call with analysts.
• Headquarters: Santa Ana
• Business: Real estate data provider
• Founded: 2010 (spun out from First American Corp., now known as First American Financial Corp.)
• Ticker symbol: CLGX (NYSE)
• Market value: about $1.81 billion
• Notable: Leading shareholder pushing for change
CoreLogic had $358 million in revenue last quarter, up 13% from year-ago levels. It posted $29.1 million in net income from continuing operations for the quarter, up almost 35% from a year ago.
The latest earnings report and recent stock jump appear insufficient to keep Highfields from pushing additional actions at the company, which is slated to move its headquarters to the Irvine Spectrum later this year.
Highfields’ ire was raised in late February, when CoreLogic announced it had concluded a strategic review launched last summer with a decision not to put the company up for sale. It opted for restructuring moves including cutting costs, shutting some sizable operations outside Orange County and shedding some noncore assets.
The moves were supported by First American, which now operates under the First American Financial Corp. name. The title insurance company owns about the same amount of CoreLogic shares as Highfields after shedding about a third of its shares last year.
First American also is familiar to board nominee Christenson. The former chief financial officer of Las Vegas-based Station Casinos Inc. was one of five board members added to First American’s board in 2008 in a shake-up also instigated in part by Highfields, which at the time was a large shareholder in First American Corp.
The investor also was believed to be a driving force in the early-2008 decision to split the company’s title insurance and data analytic operations into separate businesses, which resulted in the CoreLogic spin-off.
The separation of the two companies was delayed for about two years amid the turbulent economy and tough mortgage and real estate conditions.
Christenson stepped down from First American Financial’s board about a year ago, saying he “objected to the processes by which the board of directors of the company’s former parent company arrived at certain decisions,” according to regulatory filings.
CoreLogic said in March that it had postponed its annual meeting until the summer, in order to allow an executive search firm the time to find two new board members. A date for the rescheduled meeting has yet to be announced.
The three members nominated by Highfields “have the requisite independence, knowledge and judgment necessary to help the company identify and execute on its opportunities,” the company said last week in a letter to CoreLogic.
