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CoreLogic Says Revised CoStar Bid Lags Current Agreement

CoStar revised its all-stock bid for CoreLogic to reflect a $6-a-share cash component. CoreLogic says the revised bid still isn't superior to its current buyout deal.
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CoreLogic  (CLGX) - Get CoreLogic, Inc. Report said that a revised bid from CoStar Group (CSGP) - Get CoStar Group, Inc. 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. 

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“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.