Highfields Capital Management LP, the $11 billion investment firm run by Jonathon S. Jacobson, said it was disappointed in CoreLogic Inc. (CLGX)’s decision to “continue business as usual” and called for a management change.
CoreLogic said yesterday that its board voted to end a strategic review that it began in August to explore options including a sale or merger of the company, and divestiture of some of its businesses.
“The board’s decision to abandon the strategic review process and continue business as usual is troubling in light of the company’s long history of financial and operational missteps despite its irreplaceable, world-class assets,” Jacobson, the founder of Boston-based Highfields, said in a statement today.
Highfields, CoreLogic’s largest shareholder, said that since 2007 it has provided advice to the Santa Ana, California- based seller of property and credit data. The investment firm said CoreLogic management’s failings include its inability to forecast performance and meet financial projections from a 2010 investor day presentation and constant revisions of earnings guidance in 2011 and this year.
D. Van Skilling, CoreLogic’s chairman, said the firm entered this year with “excellent momentum,” citing the successful execution of cost reduction programs.
“The company is optimistic about its prospects for the coming year, and its strong cash position gives it additional flexibility to drive stockholder value,” Skilling said in yesterday’s statement.
‘Dismal’ Track Record
CoreLogic gained 5.4 percent to $14.88 at 12:27 p.m. in New York trading. The firm’s shares have gained 15 percent this year after slumping 30 percent in 2011.
“Our preference is to get leadership in place who can better manage this business and restore shareholder confidence,” Farhad Nanji, a managing director at Highfields, said in a telephone interview.
In today’s statement, Highfields said CoreLogic has a “dismal” track record in acquisitions, including buying shares of First Advantage Corp. (FADV) in November 2009 for an implied value of $1.1 billion even as the company was falling short of its own internal projections. First Advantage’s businesses were either shut down for a loss or sold at significant discounts to cost, and what is left is worth far less than what CoreLogic paid, Highfields said.
Jacobson said that “current management has proven without a doubt that it is incapable of managing expenses and seizing on revenue opportunities.”
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