On the heels of announcing it's ended its strategic review and possible sale plans, CoreLogic now faces a call by its largest shareholder for new management.
Boston-based Highfields Capital Management, which owns a 7.7% stake in CoreLogic, accused CoreLogic's board of directors' "desire to maintain control rather than doing what is in the best interest of shareholders," for the "failed process."
"While we agree with the Board that there is tremendous potential for value creation, current management has proven without a doubt that it is incapable of managing expenses and seizing on revenue opportunities," a Highfields Capital statement reads.
During a conference call to discuss CoreLogic's fourth quarter and year-end financial results, President and CEO Anand Nallathambi countered those claims, saying the board's review included receiving and soliciting "indications of interest" from potential buyers, some of whom performed confidential due diligence and had meetings with senior management. Ultimately, the committee decided staying the course is in the best interest of shareholders, resulting in the board's unanimous decision to end the review process.
"None of the expressions of interest were likely ultimately to yield a meaningful premium to the trading range of CoreLogic's common stock and the company's enhanced business plan offered a greater potential for stockholder value creation," Nallathambi said.
At close of markets Monday, CoreLogic reported a $14.1 million loss for the fourth quarter of 2011 and a full-year loss of $66.5 million; better than the $27.7 million loss in 4Q10 and full-year 2010 loss of $67.3 million.
CoreLogic's 4Q11 adjusted revenue increased 7.4% year-over-year to $360.9 million, driven by a 25% increase in data and analytics and a 4.6% increase in mortgage origination services volumes.
"Our financial results clearly demonstrate that we are capturing the benefit of our strategy of investing in our data and analytics and positioning our mortgage originations and default services businesses to outperform their markets," Nallathambi said. "These results make it clear that our origination servicing businesses are well positioned to fully capitalize on the eventual rebound in the mortgage industry."
Still, Highfields Capital remains skeptical, citing CoreLogic management's "consistent inability to forecast its own performance," and "failing to meet the financial projections in its very first 2010 Investor Day presentation."
"As much as anyone, we hope that the Company can deliver on the 2012 projections it confidently made in its earnings release," said Highfields Capital CEO Jonathon Jacobson in a statement released before Tuesday's call. "However, given its history of mismanagement, CoreLogic requires a change in leadership to meet these projections and seize the growth opportunities that have long been available to it."
"We look for the Board to acknowledge this reality and promptly act accordingly," the statement continues. "To be clear, maintaining the status quo is not an option."
CoreLogic was spun off from First American Corp. in June 2010. In August, CoreLogic announced it would evaluate the company's financial strategy and "explore a wide range of options aimed at enhancing shareholder value," up to and including a possible sale or merger of the Santa Ana, Calif.-based provider of mortgage and property data, analytics, technology and services.
At the time, Highfields Capital publicly called the company's sale to a strategic or financial buyer "the best possible way to serve the interests of all shareholders."
