Dolphin Limited Partnership, a Stamford, CT-based investment firm, has requested “books and records” pertaining to infoUSA’s activities, as well as those of its officers and directors. Dolphin holds 1.2 million shares, or around 2.2%, of the Omaha, NE-based data firm’s stock.
InfoUSA CEO Vinod Gupta was unavailable for comment at deadline.
Dolphin’s actions follow a month in which Gupta withdrew an offer to purchase shares of the company he does not already own for $11.75 per share. Following a run-up of the stock’s price, a special board Gupta had put in place recommended rejection of his offer and was subsequently dissolved. The stock closed Tuesday evening at $10.45.
In a statement, Dolphin cited “highly unusual related party transactions, numerous irregular public disclosures and events surrounding the aborted proposal for a going private transaction, as well as a general failure of the board to ‘administer any real oversight’” as reasons for its requests. As a result, Dolphin claimed, shares of infoUSA are trading at below market value.
According to Dolphin’s statement, the investment firm is seeking information from infoUSA regarding the following alleged activities:
Transactions and payments between infoUSA, Gupta and his affiliates relating to use of or acquisition of planes, boats, skyboxes, and other assets;
Deliberations relating to the stockholder rights plan and a letter given to the board of directors by Gupta, in which Gupta allegedly claimed that he would not acquire any more shares of company stock unless infoUSA was going to enter into a combination with another entity, or there would be a change in control of the company;
Transactions relating to Gupta’s affiliate alleged, Everest Funds;
Possible violations of infoUSA’s code of conduct; and
Information regarding the special committee formed to consider Gupta’s proposal for taking the company private.
Both the language and the activity mirror actions Dolphin has taken against other companies.
Dolphin has a history of taking small equity positions in firms and launching similar complaints against them. Recent targets include Johnson Outdoors, Hollywood Entertainment and Dave & Buster’s.
Dolphin isn’t the first firm to raise questions regarding infoUSA management, however. Following Gupta’s offer withdrawal last month, James Awad speculated that there might have been other offers for the firm, which were higher than Gupta’s and had not been pursued. Awad’s firm, Awad Asset Management, owned 2.8 million shares of infoUSA stock as of late August.
At the time, Gupta told the Omaha World Review ““Since I withdrew my offer, any offer we get the whole board will review. I don’t know what [Awad] is talking about. I have not seen any offers.”
Network
