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Fair Isaac Spikes on Sale Push

Fair Isaac (FIC) stock took off Friday morning on news that an investor is putting pressure on the company to sell.

Thomas Sandell, CEO of Sandell Asset Management, sent a letter Friday to Fair Isaac CEO Mark Greene, urging the board to find a buyer. Greene joined the company in February.

Shares of the Minneapolis, Minn.-based software maker were up $2.60, or 7%, to $39.98 midday on heavy volume.

Sandell's letter stated that he was encouraged by new management plans to improve operating results but said a turnaround would be more successful if Fair Isaac were part of a larger organization or if it were taken private.

He urged the board to set clear benchmarks for management while evaluating strategic options, such as a sale. Sandell Asset Management recently acquired a 5% stake in Fair Isaac.

Fair Isaac did not return a call requesting comment.

The company's flagship product, FICO scoring, which brings in $170 million in revenue, is under threat from Vantage Score, a new credit-scoring product created by a consortium of Fair Isaac's three credit bureau customers.

"We expect it to be used to keep us honest in negotiations on price," CFO Chuck Osborne said at an analyst conference in May. Fair Isaac is suing Vantage Score for patent infringements.

Osborne said the company is now targeting organic growth of 7% to 10%, and EPS growth of 10% to 13%.
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