Vin Gupta, former chairman of the board and CEO of InfoGroup, wants to either buy the company outright or else sell his 40% stake in connection with the sale of the company in its entirety to someone else.
Gupta expressed his wishes concerning InfoGroup in a press release on the Monday before Christmas. “I believe that InfoGroup stockholders would benefit from a cash or liquid stock proposal for their shares,” said Gupta in a statement.
The company’s new chairman Bernard W. Reznicek responded with his own press release, questioning whether a sale would be in the best interests of the other stockholders.
“The present economic environment in general and capital markets in particular suggests this would be a challenging time to try to maximize shareholder value by selling the company,” said Reznicek’s statement.
Gupta announced that he’s considering whether to make a cash offer with an equity partner to take over the company. He has retained the Blackstone Group as his financial advisor and Latham & Watkins as legal counsel.
InfoGroup’s board of directors will review general market conditions and business operations projections with its independent financial advisor Evercore Partners to determine what’s in the best interests of shareholders, according to Reznicek.
Gupta remains one of InfoGroup’s directors, which means he shares with all the directors the same fiduciary obligations to all the company’s stockholders, Reznicek noted.
Gupta was ousted from being chairman in July and then ousted as CEO in August, as part of a litigation settlement with shareholders. That lawsuit concerned Gupta’s spending habits.
Gupta was accused of receiving excessive reimbursements for spending lavishly on lodging, flights, meals, private memberships, use of residences and legal fees. The company’s board subsequently sold the company yacht and barred personal use of corporate jets.
Gupta was granted approximately $10 million in severance pay and $4.1 million to pay his legal expenses. InfoGroup reported these costs contributed to a roughly $1.7 million operating loss for the company in the third quarter.
InfoGroup formerly known as InfoUSA was founded by Gupta in 1972. Under his leadership, the company acquired Direct Media, Edith Roman Associates, Millard Group, Mokrynskidirect, Rubin Response and other list and data services companies.
