ValueAct Ups Acxiom Takeover Bid

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On the heels of Acxiom Corp.'s second-quarter earnings report, investment firm and Acxiom suitor ValueAct Capital Partners LP increased its takeover bid by $2 per share yesterday to $25 per share, or $2 billion, for all outstanding shares of Acxiom common stock.


In a letter to Acxiom's board of directors dated yesterday, ValueAct managing partner Jeffery W. Ubben upped the per share offer and criticized the company's Q2 earnings.


"The second-quarter results reported on October 19th further confirm our belief that assets are being poorly deployed, opportunities missed, and that shareholder value is being eroded by current management," the letter began. "It is clear to us that there is an urgent need for a fundamental change in the company's strategic direction. It is also clear that the only way to bring about that change is by replacing Acxiom's leadership."


Acxiom, Little Rock, AR, said it would review the letter and determine the best course of action.


"Acxiom senior management strongly disagrees with ValueAct's analysis of our business, and we believe the results of this last quarter and the continuing progress we are making are evidence that we are moving in the right long-term direction," said Acxiom company leader Charles D. Morgan in a statement released yesterday.


ValueAct Capital first stated its intentions in a June 3 letter from Ubben that disparaged Acxiom's financial management and board of directors for failing to increase shareholder value.


Acxiom's revenue rose but profits fell for the Q2 fiscal 2006 ended Sept. 30, the company said in its earnings report released Oct. 19.


Revenue was $330.5 million for Q2 2006, up 11 percent from $299.1 in the previous year's quarter. Profits were $7.1 million, or 8 cents per share, versus $18.5 million, or 20 cents per share, in Q2 2005.


The earnings reflect pre-tax charges of $15.8 million associated with restructuring that stemmed from shortfalls in Q1.


ValueAct also reiterated its Oct. 3 announcement that it has selected three executives to step into leadership positions at Acxiom if it acquires the company. They are Lou Andreozzi, former president and chief executive officer of the legal research division of LexisNexis, who would serve as Acxiom's chief executive officer; Michael Lawrie, formerly chief executive officer of Siebel Systems, Inc.; and Michael Wood, former chief financial officer of Worldspan LP.


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