Acxiom Corp.: MMI Investments Opposes Acquisition

In an amended 13D filing on Acxiom Corp. (ACXM), 8.2% holder MMI Investments, L.P. disclosed a letter to the Board of Directors expressing its intention to vote its shares in opposition to the Proposed Merger of the company with Silver Lake and ValueAct Capital, for cash consideration of $27.10 per share.

The firm said, "We do not believe this price represents fair value for our shares and note that it is: below what we believe to be a reasonable LBO valuation; significantly less than the price Acxiom would command were it valued at the mean multiple of LTM EBITDA in what we believe to be precedent transactions; and nearly 20% below the price Acxiom would command if it were valued at the LTM EBITDA multiple from ValueAct’s last offer for the company in 2005, prior to ValueAct’s joining the Acxiom Board."

A Copy of the Letter:

Dear Members of the Board:

MMI Investments L.P. is Acxiom’s second largest stockholder with approximately 8.2% of the outstanding stock. We have long been supportive of Acxiom’s operational and growth initiatives and believed our stock was significantly undervalued. We are therefore extremely disappointed by the Board’s decision to accept the $27.10 per share offer from ValueAct Capital and Silver Lake Partners. We are opposed to this deal as currently valued and intend to vote our shares in opposition for the following reasons:
We do not believe this price represents fair value for our shares and note that it is:
- below what we believe to be a reasonable LBO valuation;
- significantly less than the price Acxiom would command were it valued at the mean multiple of LTM EBITDA in what we believe to be precedent transactions;
- and nearly 20% below the price Acxiom would command if it were valued at the LTM EBITDA multiple from ValueAct’s last offer for the company in 2005, prior to ValueAct’s joining the Acxiom Board.
Our concerns about valuation are only amplified by our frustration with both the timing and structure of this transaction. Given the strategic initiatives currently underway (and recent earnings pain that your existing stockholders have had to bear) we struggle to understand why this is the right time to sell our company. Moreover it is our belief that the “go-shop” mechanism is a poor substitute for a full auction for a comprehensively marketed property. We can only hope that the “go-shop” for our company is a genuine one, with clear, concise, and thoughtful distribution of information, and thorough outreach to potential buyers from Acxiom’s industry, as well as those in comparable or tangential industries, and financial buyers (many of whom have significant experience and resources in the marketing data and informatics industry).
If any of the parties would like to discuss our views, we welcome the opportunity. Meanwhile unless or until a deal representing fair value for our shares emerges, we remain opposed to ValueAct Capital and Silver Lake Partners’ $27.10 per share offer and intend to vote our shares in opposition.
Sincerely,
Clay Lifflander