Gupta eyes buyout of InfoGroup
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US-- InfoGroup founder Vin Gupta is looking into buying the remaining share of the database marketing and research company, in which he holds a 40% stake.
Gupta said in a statement yesterday that InfoGroup should “explore strategic alternatives, including a sale of the company”, which owns research agencies Guideline, Macro International, NWC, OneSource, Opinion Research International and ORC International.
He said he is already exploring a proposal with an equity partner to make a cash bid for the firm, but would “under appropriate circumstances, also be willing to sell his family's shares in connection with a sale of the entire company”. Based on its $4.39 share price today the firm is worth around $250m.
The firm's new chairman Bernard Reznicek said in response that “this would be a challenging time to try to maximise shareholder value by selling the company,” but that the firm's independent directors and advisers would review the situation nonetheless.
Reznicek said the firm's directors “frequently focus on various opportunities that may present themselves for us to further shareholder interests”. He praised the firm's management team and the efforts made recently to strengthen the team and develop strategic plans.
Gupta was previously chairman and chief executive of InfoGroup, but stood down from both roles earlier this year after he was found to have made “excessive” corporate expense payments to other companies that he owned.
The firm was reprimanded by the Nasdaq stock exchange for the payments, and recorded an operating loss in the third quarter as a result of the costs of litigation related to the matter.
It has now separated the roles of chairman and CEO and introduced new corporate governance procedures.
Reznicek's statement said: “In addition to the positive actions we have taken, the present economic environment in general and capital markets in particular suggests that this would be a challenging time to try to maximise shareholder value by selling the company. Nevertheless, because the company founder and major shareholder has expressed an interest in selling the company, the independent directors will review with Evercore Partners, the company's independent financial advisor, our present and projected results of operations and general market conditions to determine what is in the best interests of all our shareholders. If Mr Gupta does wish to sell some or all of his shares, the company will do what is practical to cooperate with those efforts”.
Author: Robert Bain
