(Reuters) - CoreLogic Inc (CLGX.N) shareholders Cannae Holdings Inc (CNNE.N) and Senator Investment Group said on Wednesday they will seek to replace nine of the U.S. property data and analytics company’s board directors after it spurned their $7 billion takeover bid.
The two investment firms, which own 15% of CoreLogic, said they will call for a special meeting for shareholders to vote on replacing most of the company’s 12-member board with independent directors put forward by Cannae and Senator.
They accused CoreLogic of launching a “scorched earth” defense by diluting their stake to delay the launch of the special meeting, inviting scrutiny of the bid from the Federal Trade Commission, timing the issue of its earnings guidance, and adopting a poison pill.
“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,” CoreLogic chairman Paul Folino responded in a statement.
CoreLogic has said that it is not in the best interest of its shareholders to open its books to Cannae and Senator for an offer that undervalues the company. The $65-per-share all-cash bid represents a 23% premium to CoreLogic’s valuation the day before it was unveiled. CoreLogic shares were hovering around $68 on Wednesday afternoon.
Last week, CoreLogic announced a 50% increase in its dividend, as well as plans to buy back $1 billion worth of stock by 2022. It raised its 2020 earnings guidance by more than 15% and issued strong guidance for 2021 and 2022, on the back of low interest rates which have shielded much of the mortgage market from the economic fallout of the coronavirus outbreak.
Cannae and Senator said that CoreLogic is enjoying the peak of the mortgage cycle. They have argued Cannae’s Chairman Bill Foley, who has over three decades experience as a financial industry operator, make their consortium the best buyer for the company.
Reporting by Greg Roumeliotis in New York; Additional reporting by Neha Malara in Bengaluru; Editing by Shinjini Ganguli and Diane Craft