ValueAct Capital, a once-rebuffed Acxiom takeover candidate, is making another run at the Little Rock, AR-based data firm. This time, however, ValueAct is coming at Acxiom with a potential CEO candidate and two potential board members well versed in the information industry, along with nearly 11% of Acxiom’s stock.
On Oct. 3, ValueAct Capital sent a letter from its managing partner Jeffrey W. Ubben informing Acxiom’s board of directors that it was still interested in acquiring all of the shares of Acxiom it does not already own, according to Securities and Exchange Commission filings.
“He is trying to step up the pressure,” said Acxiom CEO Charles Morgan in an interview. “I think he wants the same thing he’s always wanted. He knows he’s not going to buy it for $23 a share. He wants to make a big profit on his $200 million [stock] investment.”
That may be the case, but Ubben’s latest effort includes a twist: ValueAct has recruited Lou Andreozzi, most recently president and CEO of LexisNexis; Mike Lawrie, a former CEO of Siebel Systems; and Mike Wood, who had previously served as CFO of Worldspan Technologies and senior vice president and general manager of ChoicePoint Inc. as consultants.
All three have agreed to stand for election to Acxiom’s board of directors. Additionally, if ValueAct is successful in gaining control of Acxiom, Andreozzi would be a candidate for the CEO position currently held by Morgan.
Morgan is dismissive of this. “I think it is all part of stepping up the pressure,” he said. “I don’t see these guys moving to Arkansas to run Acxiom. I really don’t see that as a likelihood.
“[Ubben] is basically threatening a proxy fight, and that is really what this is all about. He can’t get control of the board for two years. They are not just going to pay Lou [Andreozzi] 600 grand a year to hang around.”
Acxiom’s board consists of nine members, and terms have been staggered to prevent a mass takeover during a single election.
Acxiom is not the only data firm in play: infoUSA was the subject of a recent unsuccessful takeover attempt by its CEO Vinod Gupta, and Great Universal Stores has been looking to divest itself of Experian.
The increased interest reflects an industry that has paid the high fixed costs of databases, and is now reaping the incremental rewards of adding clients, products and revenue, according to Michael Petsky, a partner at investment bank Petsky-Prunier.
“It’s not just our industry,” Petsky said. “Many industries are being impacted by hedge fund activities. Data firms are achieving solid profitability numbers. As an information intensive society, you can foresee the need for companies that manage customer information.”
The move marks the second time ValueAct has proposed acquiring Acxiom. On July 20, Acxiom rejected a $23-per-share offer ValueAct had made for it, saying it felt ValueAct’s offer was not in its shareholders’ best interest. On Tuesday, Acxiom’s stock closed at $19.76 per share.
If there is a struggle for control of the company, it will be an expensive one. Acxiom holds a poison pill provision requiring company officials to sell their stock at a price considerably higher than the per-share average during the weeks before a hostile takeover. However, in order for Acxiom’s poison pill to come into play, a potential acquirer has to hold at least 20% of the stock. ValueAct has a ways to go before reaching that level, and can avoid it entirely by aligning itself with other investors.
Representatives from ValueAct had not returned calls for comment at deadline.
If ValueAct does go through with the takeover, it would not be the San Francisco-based investment firm's first foray into the information industry. The company manages $1.5 billion in assets, including shares of marketing services and customer analysis firm Catalina Marketing; bankruptcy document management software firm Epiq Systems Inc.; medical management software and services firm Per-Se Technologies Inc.; and engineering software firm MSC.Software Corp.
ValueAct previously owned a 32% stake in OneSource Information Services Inc., a business information company, until it sold the shares to InfoUSA for around $33 million in late April 2004. ValueAct also held a 22% stake in Martha Stewart Omnimedia, but sold most of its holdings in that company during late February and early March of this year. Ubben served as chairman of Martha Stewart Omnimedia between June 2003 and July 2004.
