UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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CORELOGIC, INC.
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Corporate Office 40 Pacifica, Suite 900 Irvine, CA 92618
Direct 949.214.1651 aahenry@corelogic.com |
November 9, 2020
Glass Lewis & Co., LLC
255 California Street
Suite 1100
San Francisco, CA 94111
Ladies and Gentlemen,
We appreciate the opportunity to respond directly to the 2020 Glass Lewis Report on CoreLogic’s November 17, 2020 Special Meeting. Please find the following press release incorporating a letter to shareholders issued today, as well as key slides from the investor presentation filed by the Company this morning, which directly address certain points raised in the report and detail why we believe Glass Lewis reached the wrong conclusions. We invite our shareholders to review our materials and would be pleased to discuss any questions they may have. Investors may contact Dan Smith, 703-610-5410, danlsmith@corelogic.com.
Sincerely,
Aaron Henry
Chief Legal Officer
CoreLogic Provides Update on Strategic Review Process;
Issues Open Letter to Shareholders
Written indications of interest received from multiple parties at values of at least $80 per share
Irvine, Calif., November 9, 2020 - CoreLogic (NYSE: CLGX), a leading global provider of property information, insight, analytics and data-enabled solutions, today provided an update on its review of strategic alternatives to correct misinformation in the market.
The CoreLogic Board’s review of strategic alternatives is progressing well. We have received written indications of interest in acquiring the Company at values of at least $80 per share from multiple competing parties. This is more than $1 billion -- or over 20% -- above the Senator/Cannae proposal. Interested parties are receiving due diligence access after executing customary confidentiality agreements. Additional credible parties have indicated they are preparing to join the process.
CoreLogic is providing this information to correct the steady stream of baseless misinformation reportedly being pumped into the market by Senator/Cannae. Building off the record operating and financial performance over the past year, along with the growing strength of the business and multi-year forecasts, CoreLogic’s Board has positioned shareholders to maximize value. Interested parties have cited the strength of our performance and positive multi-year outlook as reasons supporting their interest at levels of at least $80 per share.
Senator/Cannae, on the other hand, first urged CoreLogic shareholders to accept a woefully inadequate $65 per share proposal. Next, they attacked CoreLogic for not pursuing an auction based on a $66 per share proposal. Then, they advocated signing an agreement at $66 per share with a go-shop provision (a value-destructive path that would have taken substantial value from our shareholders). During the entire time, they have self-servingly sought to deny CoreLogic’s value proposition. CoreLogic’s Board has been proven right to reject these pressure tactics by Senator/Cannae -- all of which have been proven to be harmful to the interests of CoreLogic shareholders.
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Most recently, CoreLogic has learned that Senator/Cannae are suggesting to market participants that our strategic review process is somehow not real – yet another false assertion. The facts are clear: interested parties recognize that our process is real and have engaged at levels far in excess of what Senator/Cannae were willing to pay.
The bottom line is that the Board and management team are laser-focused on value maximization. These are the facts:
• | We are delivering outstanding operating and financial results. |
• | The Board correctly rejected an opportunistic lowball bid by Senator/Cannae despite an aggressive stream of hostile pressure tactics. |
• | The Board is overseeing a rigorous strategic review to pursue value maximization. |
• | The strategic review process has already secured multiple expressions of interest of at least $80 per share from credible parties. |
In connection with this update, CoreLogic issued an open letter and fact sheet to CoreLogic shareholders reiterating the Board’s commitment to maximizing shareholder value. The letter and fact sheet are posted online at CoreLogicValue.com. The text of the letter follows:
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November 9, 2020
Dear Fellow CoreLogic Shareholder,
VOTE AGAINST THE SENATOR/CANNAE PROPOSALS
CoreLogic is firing on all cylinders and delivering outstanding financial and operational performance. Building on an excellent first half of 2020, we recently announced record third quarter financial results -- the strongest operational and financial performance in our history. We are delivering record revenues, record adjusted EBITDA and cash flow, and returning substantial capital to shareholders. We have high confidence this strong momentum will continue in 2021 and 2022. Our confidence reflects the robust underlying trends in the markets we serve, our increasing recurring revenue, substantial new business wins, and share gains which are driving accelerating growth in our non-mortgage business and continuing profitability increases.
This backdrop of strong performance, increasing momentum, and high visibility into our growth trajectory puts the Company in a position of strength – and the Board’s strategic review has already generated multiple written indications of interest in the $80+ per share range. Importantly, it has validated the Board’s decision to unanimously reject Senator/Cannae’s $66 per share proposal which dramatically undervalued CoreLogic.
Yet, despite the uncontestable evidence that Senator/Cannae were wrong on value and not aligned with shareholders’ best interests, they are continuing to push a proxy fight and seeking to undermine the Company’s value and the Board’s strategic review. Senator/Cannae are trying to install nominees who they paid to participate in this proxy fight in support of a $66 per share proposal – a proposal which has been clearly proven to be woefully inadequate. These nominees should not be trusted to maximize value for shareholders.
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CORELOGIC’S BOARD IS CONDUCTING A THOROUGH STRATEGIC REVIEW WHICH HAS ALREADY RESULTED IN MULTIPLE EXPRESSIONS OF INTEREST AT LEVELS FAR IN EXCESS OF SENATOR/CANNAE’S LOWBALL PROPOSAL
CoreLogic’s Board has been meeting weekly and is actively overseeing the strategic review process. Contrary to what Senator/Cannae’s continuing misinformation campaign would have you believe, this is a genuine process. We believe our Board’s decisions on process and timing position us to maximize value for shareholders. Consider the following:
• | Senator/Cannae wanted us to run an auction this summer anchored to a $66 proposal, which would have resulted in proposals at levels far below what our Board has achieved. |
• | While they were pushing their lowball proposal, they were simultaneously attempting to undermine the Company’s value with a stream of mischaracterizations and false statements. |
• | Instead of capitulating to that pressure, the Board provided transparency to shareholders regarding our upward trajectory and value proposition and continued to focus on delivering record results and a high-confidence outlook. |
• | Our record performance crystallized third-party interest at $80+ per share; we believe soliciting interest earlier would have resulted in lower values. |
The bottom line is that our Board is laser-focused on maximizing value and has always done, and will always do, the right thing for shareholders.
We have received written indications of interest from multiple parties expressing interest in an acquisition of the Company in the $80+ per share range, and we have proactively reached out to other potentially interested parties. We have publicly committed to engaging with all credible potential buyers who express interest at an appropriate price level and sign a standard NDA.
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CORELOGIC’S BOARD IS THE RIGHT GROUP TO OVERSEE OUR ONGOING STRATEGIC REVIEW, WHILE SENATOR/CANNAE’S NOMINEES LACK EXPERIENCE AND QUALIFICATIONS AND WOULD UNDERMINE THE PROCESS
CoreLogic’s Board is comprised of 12 highly qualified industry leaders – including five appointed within the last four years – with track records of shareholder value creation and deep expertise aligned with our business, including:
• | All 12 directors have real estate, insurance, and/or technology experience. |
• | 9 of 12 directors have financial and/or public company M&A experience. |
• | 7 of 12 directors have private equity/investing experience. |
• | 7 of 12 directors have public company CEO/CFO/COO experience. |
CoreLogic’s Board has overseen a successful transformation that has led to record earnings and cash flow in 2020, substantial capital return to shareholders, and high visibility into strong growth and further margin expansion in 2021 and 2022, all of which has made us more attractive to potential buyers. CoreLogic’s Board is in the best position to review strategic alternatives -- having overseen M&A transactions with a combined value in excess of $30 billion and taken decisive actions to ensure CoreLogic’s continued success.
CoreLogic’s entire Board is up for election at the 2021 Annual Meeting and expects to be judged by shareholders based on the way we conduct the review process. It is the Board’s successful strategy that has shielded shareholders from the value destruction of Senator/Cannae’s lowball $66 proposal and generated interest from multiple parties at $80+ per share -- an improvement of more than $1 billion from Senator/Cannae’s proposal.
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Senator/Cannae are trying to replace the Board that has overseen a strategy that has created substantial shareholder value with candidates nominated in support of a woefully inadequate proposal. Not only do their candidates lack the breadth and depth of experience that CoreLogic’s current directors possess, they signed on to Senator/Cannae’s campaign to start an auction at a low price, which we believe would have resulted in much lower proposals than CoreLogic’s Board has recently obtained. Consider that these candidates are tethered to an activist that has:
• | Executed a campaign characterized by misstatements, outright falsehoods, and attempts to undercut shareholder value. |
• | Repeatedly attacked CoreLogic’s performance and been proven wrong. |
• | Disseminated misinformation and urged shareholders to take a $66 zero premium proposal with a half-baked go-shop provision, which would have left substantial value on the table. |
• | Demonstrated a lack of understanding about how to maximize shareholder value. |
• | Attempted to undermine the Board’s strategic review by advocating for a rushed process that would not maximize value for shareholders and making false statements about the Board’s sincerity in order to sow uncertainty with potential buyers. |
• | Created a massive distraction to the business and the strategic review by attempting to upend the Board that has engaged in a very successful strategy. |
It is clear that Senator/Cannae are focused on their own interest and agenda – not the best interests of other CoreLogic shareholders. The fact is they have been completely wrong at every turn about how to execute a process to maximize value.
PROTECT THE VALUE OF YOUR INVESTMENT -- A VOTE AGAINST REMOVAL OF THE CORELOGIC DIRECTORS IS IN YOUR BEST INTERESTS
We strongly urge you to vote today on the WHITE proxy card AGAINST all of the Special Meeting agenda items. Simply discard any Gold proxy card you may receive from Senator/Cannae. If you have inadvertently already used the Gold proxy card to vote your shares, you have every right to revoke your prior vote by simply using the WHITE proxy card to vote again, as only your latest-dated proxy will count.
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Thank you for your continued support.
Paul Folino | Frank Martell | |
Chairman of the Board | President and Chief Executive Officer |
The CoreLogic Board of Directors urges shareholders to vote AGAINST all of Senator/Cannae’s proposals using the WHITE proxy card
You can easily vote by mail, phone, or online as follows:
• | You can simply sign, date and return the WHITE proxy card/voting instruction form by mail in the envelope provided. |
• | OR, even easier, you can vote by phone or by Internet: |
• | Just locate the Control Number on the WHITE proxy card or voting instruction form and have it handy when you access the telephone number or website indicated on your proxy card/voting instruction form. |
• | Follow the simple prompts provided on the phone or website. |
If you have questions about how to vote your shares, please contact:
Innisfree M&A Incorporated
Toll-free at (877) 750-9498 (from the U.S. and Canada)
or
+1 (412) 232-3651 (from other locations)
Thank you for your support!
About CoreLogic
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, buy, and protect their homes. For more information, please visit www.corelogic.com.
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Safe Harbor/Forward Looking Statements
Certain statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including but not limited to those statements related to expected financial results and the near and long-term consequences of the unsolicited proposal we received from Senator Investment Group, LP (“Senator”) and Cannae Holdings, Inc. (“Cannae”) on June 26, 2020, as revised on September 14, 2020 (the “Unsolicited Proposal”). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include the risks and uncertainties set forth in Part I, Item 1A of our most recent Annual Report on Form 10-K and Part II, Item 1A of our most recent Quarterly Report on Form 10-Q, as such risk factors may be amended, supplemented, or superseded from time to time by other reports we file with the Securities and Exchange Commission. These risks and uncertainties include but are not limited to: any potential developments related to the Unsolicited Proposal; any impact resulting from COVID19; our ability to protect our information systems against data corruption, cyber-based attacks or network security breaches; limitations on our ability to repurchase our shares; changes in prices at which we are able to repurchase our shares; limitations on access to or increase in prices for data from external sources, including government and public record sources; systems interruptions that may impair the delivery of our products and services; changes in applicable government legislation, regulations and the level of regulatory scrutiny affecting our customers or us, including with respect to consumer financial services and the use of public records and consumer data; difficult conditions in the mortgage and consumer lending industries and the economy generally; uncertainties regarding the outcome of any discussions with third parties indicating an interest in acquiring CoreLogic; risks related to the outsourcing of services and international operations; our ability to realize the anticipated benefits of certain acquisitions and/or divestitures and the timing thereof; and impairments in our goodwill or other intangible assets. CoreLogic can offer no assurances that it will enter any transaction in the future or, if entered into, what the terms of any such transaction would be. The forward-looking statements speak only as of the date they are made. CoreLogic does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Contacts
Investors:
Dan Smith
703-610-5410
danlsmith@corelogic.com
Media:
Sard Verbinnen & Co.
George Sard/Robin Weinberg/Devin Broda
CoreLogic-SVC@SARDVERB.com
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OUR BOARD IS LASER-FOCUSED ON SHAREHOLDER VALUE CREATION Our performance is strong, our revenues are recurring and diversified, and our trajectory is upward We have delivered record revenues, record EBITDA and record cash flow in 2020 We project 2021 and 2022 to be even better, with ~95% recurring revenue and 60%+ of 2021 growth already secured by contract wins Our transformation into a leading info services provider positions us for a multiple re-rating, as has been increasingly recognized by research analysts, and provides further potential value upside Our Board’s approach has developed interest in CoreLogic at values far in excess of Senator/Cannae’s lowball $66 proposal, which clearly undervalued CoreLogic Research analysts have a median price target of $72, reaching as high as $80 (and these price targets have been increasing) We have increased 2020 revenue guidance by ~$225mm(1) and 2020 adjusted EBITDA guidance by ~$110mm(1) since the hostile proposal Our Board has solicited interests from third parties indicating an interest in acquiring CoreLogic at or above $80 per share – significantly in excess of Senator/Cannae’s lowball $66 proposal CoreLogic’s Board has tens of billions of dollars of M&A experience, substantial industry expertise and is focused on maximizing value for our shareholders Senator/Cannae’s slate was nominated to implement the lowball proposal – which they are no longer pursuing as it was clearly inadequate – and has multiple connections to Senator’s Quentin Koffey and Cannae’s Bill Foley, questionable M&A track records and no relevant industry expertise CoreLogic’s Board has delivered value, including soliciting interest at $80+, more than $1 billion – or over 20% – above the Senator/Cannae proposal Board representation is not warranted for Senator/Cannae’s nominees 1. Based on midpoint of guidance ranges 10
SENATOR/CANNAE ABANDONED THEIR UNDERVALUED PROPOSAL WHEN THE BOARD OBTAINED INTEREST AT APPROPRIATE VALUES Senator/Cannae urged shareholders to take their $65/66 price as full value, which is ~18% below the indications of interest that our Board has obtained “We are pleased to submit this proposal to acquire the Company for $65.00 per share in cash…we believe this proposal delivers full value to shareholders and is well in excess of what the Company can achieve under its current plans” – Senator/Cannae Press Release (June 26, 2020)(1) “While we are not a bidder at these prices, it would be a great outcome for shareholders” – Senator/Cannae Press Release (October 30, 2020)(1) The Board’s judgment to reject the lowball proposal has been proven correct 1. Permission to use quotes neither sought nor obtained 11
CoreLogic Is Far More Valuable Than Senator/Cannae’s Lowball Proposal CoreLogic’s Board was clearly correct in determining that Senator/Cannae’s proposal significantly undervalued the Company – and by rejecting it, has generated interest more in-line with the value of the Company Value at Historical Trading Multiples and No Takeover Premium Senator/Cannae Multiple Applied to CoreLogic EBITDA Upside Case From Multiple Expansion 2020 Adjusted EBITDA Guidance 2020 Adjusted EBITDA Multiple Implied Share Price 615 - $630 ~11.3x Pre-COVID and pre-proposal Trading Multiple(1) ~$71 - ~$73 $615 - $630 ~13.4x Implied Multiple(2) of Hostile Proposal ~$86 - ~$89 $615 - $630 ~15.1x Lowest Info Services Trading Multiple(3) ~$100 - ~$103 Source: FactSet (11/6/2020), Company filings Trading multiple based on 2/20/2020 closing price of $51.50 and midpoint of 2020 guidance issued on 2/19/2020; trading multiple based on midpoint of 2020 guidance at the time immediately prior to the launch of the hostile proposal Multiple implied by Senator/Cannae’s initial $65/share proposal and 2020E Management guidance midpoint adjusted EBITDA (~$513m) at the time immediately prior to the launch of the hostile proposal Peer group consists of CoStar, Dun & Bradstreet, Equifax, Experian, Fair Isaac, IHS Markit, RELX, Thomson Reuters, TransUnion, Verisk and Wolters Kluwer; lowest multiple of 15.1x based on Equifax; see page 18 for additional details
Sell-Side Price Targets Confirm Values up to $80 per Share CoreLogic has raised its 2020 adjusted EBITDA guidance by ~$110 million, an increase of more than 20%, since Senator/Cannae made their unsolicited proposal Note: Data based on median of all published price targets during the respective time periods 13
Our Board Has Positioned the Company to Maximize Value CoreLogic’s Board Senator/Cannae Has been transparent, responsive and solicited interest, in line with shareholder input Appointed four new directors in last three years Is comprised of diverse directors Has proven track records of M&A Conducting a strategic review designed to maximize value for shareholders Shielded shareholders from the value destruction of Senator’s lowball proposal, and generated significant interest from a number of parties at $80+, a $1bn+ improvement from Senator/Cannae’s proposal × Urged shareholders to accept a lowball $66 per share proposal × Urged us to start an auction at a low price, which would have resulted in much lower proposals than CoreLogic’s Board obtained × Nominated directors with little to no industry expertise × Criticized the Company’s projections, which have since proven to be correct × Talked down CoreLogic’s value to support its low proposal Who will do a better job of protecting your investment and maximizing value? CoreLogic’s Board has already demonstrated a clear commitment to shareholder value creation and is accountable to all shareholders at the upcoming 2021 annual meeting 14