CoreLogic (CLGX) - Get Report said that a revised bid from CoStar Group (CSGP) - Get Report is not superior to a deal the real-estate-research firm has agreed with Stone Point Capital and Insight Partners.
On Feb. 2 Bloomberg News reported that CoStar had bid stock valued at $86 a share for CoreLogic. Two days later CoreLogic said it definitively agreed to be acquired by the two investment firms for $80 a share cash.
CoStar's bid had been all-stock. According to CoStar's updated offer, CoreLogic holders would have received $6 a share cash and 0.1019 share of CoStar for each of their shares.
CoStar Chief Executive Andrew Florance said in a March 1 letter that its latest proposal represented a $1.25 billion improvement over the Stone Point-Insight offer, Bloomberg reported.
But CoreLogic's board unanimously agreed that the proposal needed further improvement, CoreLogic CEO Frank Martell said in a letter seen by Bloomberg.
The $6 a share cash "does not meaningfully reduce CoreLogic shareholders’ exposure to the concerning volatility of your stock,” Martell said.
“Any new proposal should deliver increased, more certain value and as much cash consideration as possible."
CoreLogic's board will continue to review the deal as it sees strategic potential in a combination of the two businesses, Martell said in the letter.
“Their cash bid of $80 per share was materially less than our last all-stock offer, which had a headline value of $86.30 per share," CoStar said last month after submitting its previous bid.
"The decision to accept the lower $80 per share bid from a sponsor instead indicates a failure to appropriately value the synergies of our proposal as a strategic bidder.”
Stone Point is the Greenwich, Conn., private-equity firm. Insight is the New York venture-capital firm.
CoreLogic, Irvine, Calif., launched a strategic review of its business in November amid pressure from activist investors Cannae Holdings and Senator Investment Group. The two firms eventually won three seats on CoreLogic's board.