Acxiom Board Rejects Takeover Attempt

Tuesday, December 20th 2005, 10:37 am
By: News On 6

LITTLE ROCK, Ark. (AP) _ The board of Acxiom Corp. has rejected a $2 billion offer from a private investor group that has sought to take over the data company, Acxiom said Tuesday.

San Francisco-based ValueAct Capital had offered $25 per share for Acxiom shares that the investor group does not already own. ValueAct is already Acxiom's largest shareholder, with a stake equal to 11.75 percent.

ValueAct had earlier bid $23 per share, worth $1.8 billion.

Acxiom said Tuesday its board had unanimously rejected the ValueAct offer after concluding that keeping the company public would be in shareholders' best interest.

``We have seen increasing strength in our business performance as our fiscal year has progressed, which we are confident will allow us to exceed consensus analysts' estimates and achieve the primary goals reflected in our financial road map,'' Acxiom chairman and top executive Charles Morgan said in a news release.

The company said the board spent weeks weighing whether to accept ValueAct's offer. But the company said the board concluded that management would be able to meet its financial goals, including cutting expenses. The company also said its major clients expressed concern that they would be hurt if the company was acquired.

ValueAct accused Acxiom of increasing sales without building profits, which ValueAct called ``profitless prosperity.'' ValueAct also said Acxiom's free cash flow has fallen from $174 million in 2003 to a loss of $10 million for the first half fiscal 2006.

Acxiom is to release its third-quarter earnings on Jan. 25, and the company said it would announce its financial goals for 2007 at that time. Analysts surveyed by Thomson Financial project Acxiom earnings of 24 cents per share for the quarter, up a penny from a year ago. The analysts surveyed project third-quarter revenues of $339 million.

According to the company's financial road map, Acxiom wants to increase free cash flow for the year to between $160 million and $180 million. The company's domestic revenue target is between $1.14 billion and $1.16 billion, a gain of 13 percent to 15 percent. But it has projected international revenues of between $170 million and $190 million, which would represent a drop of between 10 percent and 20 percent.

Analysts surveyed by Thomson Financial project revenues for the fiscal year of $1.33 billion. Acxiom's top-end revenue projection comes to $1.35 billion.

ValueAct managing member Jeffrey W. Ubben had said the only way to lead the company to better deploying its assets would be to replace its top executives. Ubben didn't immediately return a phone message Tuesday morning.

``The board determined that Acxiom's current strategy positions the corporation well for success in both the short and long term,'' Morgan said. ``Each of the board members worked hard to understand all aspects of the situation and, among other things, considered the viewpoints of (ValueAct) as well as Acxiom's management, and in so doing made the decision it believes will produce the best outcome for Acxiom's shareholders, clients and associates.''