InfoGroup Inc., formerly infoUSA, refused to flat-out deny a published report claiming the company was taking acquisition offers.
According to a company statement issued mid-day Sunday, infoGroup CEO Bill Fairfield would not comment specifically on the story, which ran in Omaha World-Herald. Fairfield did say “we are continually evaluating the operations and prospects for the company to determine what is best for our shareholders.”
Fairfield also reiterated that, as the company announced late last year, it had retained Evercore Partners to determine what would be in the best interest of the company’s shareholders. “That process continues,” Fairfield said in a statement.
“We have made no decision to sell the company,” infoGroup chairman Roger Siboni added in the statement. “We have several options before us, which include continuing to operate the company as an independent organization.”
According to a story dated Oct. 31 in the Omaha World-Herald, at least 33 parties have signed non-disclosure agreements which would allow access to financial records as part of a due-diligence process. The paper added that infoGroup executives are scheduled to meet this week to review preliminary bids.
A purchase of infoGroup has been a hot topic during the last few years. In 2005, founder and former CEO Vinod C. Gupta formed a special committee to investigate taking the company private.
That attempt failed, and Gupta later stepped down as both chairman of the company’s board and CEO after a shareholder lawsuit alleged the company misspent millions of dollars. As a result, the Securities and Exchange Commission and an internal infoGroup board committee investigated company spending.
The internal committee concluded that certain expense reimbursements Gupta received—including those for lodging, flights, meals, private club memberships, use of his residences, and legal fees—were excessive.
While founder Gupta remained – and remains – on the company’s board, according to the World-Herald he cannot purchase the firm, as there is a poison pill which would come into effect if he were to attempt to purchase a quantity of stock that would allow him to do so.
Direct Newsline was not immediately able to confirm the existence of such a poison pill. According to Securities and Exchange Commission documents, Gupta had been prohibited from acquiring securities in the company beyond either what he already held, or what had been granted to him.
A stipulation of settlement with the SEC indicates that “Gupta has expressly agreed not to take any direct or indirect action to repeal, change, amend, modify, or otherwise alter [a list of corporate governance measures] until Dec. 31, 2013.” Whether this specifically prohibits Gupta from directly or indirectly acquiring the company is unclear.
Gupta has not been reported as being a party to any of the alleged purchase bids.
On Oct. 24, the Omaha World-Herald reported that on Oct. 23, former infoGroup CFO (and gubernatorial candidate) Stormy Dean had been fired. Dean had been serving as executive VP and general manager of the company’s database group sales at the time of his termination. Dean resigned his position as CFO as part of the shareholder lawsuit settlement that removed Gupta from the CEO position.
