February 28, 2012 / 1:00 PM / in 7 years

UPDATE 3-CoreLogic investor seeks CEO, board changes

* Highfields says would consider all options

* Options could include launching proxy fight

* Highfields objected to CEO choice two years ago

* CoreLogic called off strategic review process

By Tanya Agrawal and Paritosh Bansal

Feb 28 (Reuters) - Highfields Capital Management LP, a large CoreLogic Inc investor, is calling for a change in the company’s management and board after the data and analytics firm ended a strategic review process in favor of its own business plan.

Highfields, which owns about 7.6 percent of CoreLogic, said it was “very disappointed” with the company’s decision and would consider all its options if the company did not engage in discussions, and changed Chief Executive Anand Nallathambi.

These options could include a proxy fight at CoreLogic, which earlier this month extended the deadline for shareholders to put up proposals at its annual meeting to March 19.

In Highfields cross-hairs is Nallathambi, who has been CEO since the company was spun off from title insurer First American Corp in June 2010. CoreLogic’s shares have fallen some 26 percent since then.

Highfields Managing Director Farhad Nanji said Nallathambi met them when he was made the CEO.

“We told him that he wasn’t ready. We told the board he wasn’t ready,” Nanji said. “The board and the chairman came back to us and said, ‘We have a lot of confidence in him, please give us a year or two. Trust me if the results aren’t there we will hold him accountable.’

“Two years have gone by, the company and its shares have underperformed, and he’s not been held accountable,” he said.

CoreLogic’s second-quarter revenue fell 4 percent year-on-year to $396 million, as a housing slump brought down mortgage originations and hit earnings.

In August last year, Corelogic hired boutique advisory firm Greenhill & Co Inc to help explore options, including a possible sale.

Sources said in September that at least two strategic buyers and five private equity firms had shown interest in the company. Last December, First American Financial dropped its plan to acquire the company, two months after it offered to buy its former unit, without citing a reason.

On Monday, CoreLogic said it had decided to end the review process and instead would pursue an “enhanced operating plan”, which includes cost cuts, selling off non-core, lower margin businesses and adding new senior management.

It said it had also reduced its U.S. workforce by 7 percent in the last quarter, and posted a narrower fourth-quarter loss, and maintained its full-year profit forecast.

However, the plan has failed to mollify Highfields, which said CoreLogic had a dismal track record in acquisitions.

It also said the company spent $161 million during the second quarter of 2011 to repurchase its shares at an average price of $18.51. CoreLogic’s shares were trading at $14.91, up 5.5 percent, on Tuesday.

CoreLogic, on a conference call with analysts, said it would not answer any questions regarding strategic options, but expects its first-quarter adjusted revenue to be higher than in the prior quarter as it continues to cut costs.

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