Acxiom Corp., Little Rock, AR, acknowledged yesterday that it received a letter from investment firm ValueAct Capital Partners LP stating its intent to issue an offer of $23 per share for all outstanding shares of common stock. The deal would value the company at $1.97 billion.
The letter, dated June 3, from San Francisco-based ValueAct Capital managing partner Jeffery W. Ubben criticized Acxiom's financial management and board of directors for failing to increase shareholder value. ValueAct owns 10 percent of Acxiom's stock.
“Acxiom has not followed through on any of the major commitments it has made to increase shareholder value,” the letter said. “Rather than holding to its public commitments to achieve meaningful margin expansion and increase returns-on-investment by driving growth with data products and by developing more standardized service delivery processes, Acxiom has instead chosen to drive growth through expansion of the IT Management segment, which is demonstrably the Company's lowest return, most capital intensive business.”
The letter also criticized Acxiom's acquisitions last year of Claritas Europe and Consodata. But it did not mention Digital Impact or SmartDM, which Acxiom bought earlier this year.
Acxiom's stock closed at $21.25 yesterday after closing at $18.24 a share Friday. That amount is still below the company's 52-week high of $27.14.
Though Acxiom has said publicly only that it received the letter, that its board would review any offer and that its leadership believed in its current business strategy, DM News obtained a copy of an internal memo from company leader Charles D. Morgan telling employees what the news means.
In the memo, Morgan said that the possible takeover bid was not a complete surprise and that any offer made as a result would be unsolicited. He also said the letter did not require Acxiom's board to abandon its strategic plan to transform its business and that, in his opinion, $23 per share did not reflect the company's true value.
He advised employees to stay focused on their jobs despite his expectation that market activity, media coverage and even direct attacks on Acxiom's leadership would result. Morgan said that senior leadership was focused on the situation and remained committed to delivering value and preventing a hostile takeover.
“To prevent abusive takeover tactics, Acxiom's board long ago implemented a number of defensive measures, including a shareholder rights plan, commonly referred to as a 'poison pill,' and staggered terms for board members, so that only a few directors come up for re-election every year,” Morgan wrote. “Acxiom's board remains committed to doing whatever is necessary to ensure that your interests and the interests of our stockholders, clients and other constituencies are protected.”
According to Hoover's, ValueAct's portfolio includes a stake in Catalina Marketing. It used to own 22 percent of Martha Stewart Living Omnimedia, but has sold much of that. It sold its 32 percent ownership of OneSource to infoUSA last year.
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters