CoreLogic $7B Takeover Bid Under Investigation by FTC

By McCord Pagan in Law360 on July 15, 2020

Law360 (July 15, 2020, 10:34 PM EDT) — The Federal Trade Commission is investigating an unsolicited, rejected proposal by Weil-led Cannae Holdings and Cadwalader-guided Senator Investment Group to take private real estate analytics business CoreLogic in a deal valuing it at $7 billion, according to a regulatory filing Wednesday.

In a short document filed with the U.S. Securities and Exchange Commission, Irvine, California-based CoreLogic Inc. said it was told Tuesday that the FTC is investigating the takeover bid lobbed late last month by Cannae Holdings Inc. and Senator Investment Group LP, and that the regulator is requesting information as part of the probe.

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On July 7, CoreLogic rejected the $65-per-share offer from Cannae and Senator as undervaluing the company and said it adopted a shareholder rights plan to prevent a takeover.

The CoreLogic board also said last week that the takeover offer raised regulatory concerns stemming from companies associated with Cannae chairman William P. Foley II, namely Black Knight Inc. and Fidelity National Financial Inc. The bid failed to address the regulatory risk in the overlap between CoreLogic and those companies, how the deal would get approved, or how long that would take, the board said.

Black Knight provides data, software and analytics for the mortgage industry, and Fidelity National said it helps provide title insurance and transaction services to the real estate and mortgage industries, according to their websites.

Foley is chairman for Black Knight and non-executive chairman of the board for Fidelity National, the companies said.

CoreLogic’s SEC filing Wednesday did not detail the exact nature of the investigation.

In a separate statement Tuesday, CoreLogic said it met with Cannae and Senator to hear about their unsolicited offer, but added the groups haven’t revised the terms of their proposal.

On June 26, Cannae and Senator made a public offer to take CoreLogic private at $65 per share, what it said was a 37% premium and a gain of 34% based on the closing stock price on June 15.

Cannae and Senator said in their June letter that they jointly owned a 15% stake in CoreLogic and added that if the board was unwilling to negotiate, that they were prepared to take the deal straight to their fellow CoreLogic shareholders.

While the investors said at the time that they hoped to constructively engage with the board, they also said they were “disappointed” to see CoreLogic’s “highly unusual” decision of issuing quarterly guidance early, and that they suspected the decision was defensive in light of high trading volume and knowledge of their interest in the company.

However, CoreLogic said later that day it was unaware of an acquisition proposal before issuing its revised guidance.

And last week, the board said the unsolicited offer was opportunistic and rushed to be made public after CoreLogic released its guidance on June 25 predicting higher-than-expected revenue for the second quarter.

As evidence, the board said the two investors hadn’t even completed purchasing their 15% stake in CoreLogic like they said they had in their public offer, and added SEC filings showed the groups acquired over a 3% stake on June 26 after they lobbed their bid.

“Tellingly, they bought some shares at prices above $68.00 per share, revealing they know the shares are worth more than $65.00 per share,” the CoreLogic board told its investors.

The board said the offer was made by two groups who understand their company, that CoreLogic has transformed its business model and has many opportunities ahead of it.

“We are unanimous in our belief that CoreLogic will be able to deliver significantly more value to shareholders than this opportunistic proposal,” Paul Folino, chairman of the CoreLogic board, said at the time.

A spokesperson for CoreLogic and a representative for Senator and Cannae declined to comment late Wednesday.

CoreLogic’s financial adviser is Evercore Inc. and it’s represented by Skadden Arps Slate Meagher & Flom LLP.

Cannae’s financial adviser is Trasimene Capital Management LLC and it’s represented by a Weil Gotshal & Manges LLP team including Michael Aiello, Eoghan Keenan, Christina De Vuono and Daniel Waxman.

Senator is represented by a Cadwalader Wickersham & Taft LLP team including Richard Brand, Stephen Fraidin and Joshua Apfelroth.