CoreLogic not breaking into pieces

by Victor Lund on February 28, 2012

If you are a stock watcher of the leading companies supplying services to the real estate industry, you have been watching CoreLogic. Since the spin out from First American, the company has been tremendously successful in terms of overall revenue and cash position, but the stock has underperformed. At one point, the stock was as low as $7.64 per share over the past 52 weeks. The high was $19.20, and the target is around $16. The company currently trades at $14.

For a company that has $250 Million in cash, a market cap of $1.53B is really low. Some of the major investors were pressuring the Directors to seek strategies like selling off the company in pieces. Thankfully, according to a release from the company today, that is not going to happen. Here is a nice article from HousingWire

CoreLogic ($14.12 0.35%) said the independent committee of the company’s board concluded its review of strategic alternatives and will focus the company’s efforts on enhancing stockholder value rather than seeking a sale or merger of the company.

The independent committee began its review in August 2011 with the assistance of financial adviser Greenhill & Co. and its legal counsel, Skadden, Arps, Slate, Meagher & Flom. CoreLogic originally called the committee and retained a financial adviser to consider a wide range of options for the future of the mortgage services firm, including a potential sale of the company.

“The independent committee and its advisers looked at many strategic options, but in the end, we believe that the company’s enhanced business plan offered greater potential for stockholder value creation than any of the other alternatives,” said D. Van Skilling, chairman of CoreLogic. “The company entered 2012 with excellent momentum, with improved market performance and the successful execution of its cost reduction programs.” The committee maintained from September 2011 that selling the company was always an outside option.

CoreLogic reported on Monday that it narrowed its fourth-quarter losses and full-year losses compared to the prior-year comparable periods.

The committee looked at a range of alternatives to enhance stockholder value, including a sale or merger of the company or some of its business lines. It also looked at repurchases of debt and common stock and other transactions.

In December, First American Financial dropped its plan to buy CoreLogic, two months after it made an offer.

The committee also reviewed CoreLogic’s operating plan for 2012 and beyond, which provides for the divestiture of noncore, lower-margin businesses and continued cost-cutting.

CoreLogic also pointed to the addition of new senior management and an improving economic landscape in its announcement to conclude the strategic review process.

“The company is optimistic about its prospects for the coming year, and its strong cash position gives it additional flexibility to drive stockholder value,” Van Skilling said.

Reuters reported Tuesday that a key shareholder expressed disappointed with CoreLogic’s decision to end the strategic review.

Highfields Capital Management, one of the company’s largest shareholders, called for a change in company leadership, according to the Reuters report.

kcurry@housingwire.com

communicatorKLC

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Victor Lund February 28, 2012 at 4:29 pm

CoreLogic Inc. (CLGX US) rose 6.2 percent to $15, the highest price since Aug. 3. Highfields Capital Management LP, the $11 billion investment firm run by Jonathon S. Jacobson, said it was disappointed in CoreLogic’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.

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