WSJ: Firms to Walk Away from Acxiom Deal

by Arkansas Business Staff  on Monday, Oct. 1, 2007 7:21 am  

The Wall Street Journal reported Monday that ValueAct Capital Partners and Silver Lake Partners are in negotiations to break off their proposed $3 billion acuiqisition of Acxiom Corp. of Little Rock.

Meanwhile, the Nasdaq has halted trading of Acxiom stock pending news.

In an article available to subscribers here, the newspaper said the sides were trying to work out a settlement. It said an agreement was close Sunday day, with the private equity firms to pay about $65 million, below the $110 million termination fee proposed in the deal.

The newspaper cited "people familiar with the matter" as it sources. Silver Lake, ValueAct and Acxiom did not comment.

The story attributed problems with the deal to the company's recent earnings reports. Last month, Acxiom laid off more than 200 employees due to two consecutive bad quarters.

"For Acxiom, Little Rock, Ark., the problems have arisen from the company's most recent earnings report, for the fiscal first quarter ended June 30. Acxiom, which provides data and software used for direct marketing and customer-relationship management, swung to a net loss of $11.5 million," the newspaper said.

"Results for the coming quarter are expected to be even worse, said one person familiar with the negotiations, which helped steer the prospective owners away. The results have helped push its stock down; its shares closed Friday at $19.79 on the Nasdaq Stock Market, well off the $27.10 in cash offered in May by ValueAct Capital Partners LP and Silver Lake Partners.

"Those two firms are expected to pay about $15 million to $20 million each to get out of the deal. The balance will come from two banks that originally funded the transaction -- Morgan Stanley and UBS AG. One of the financing banks, Bank of America Corp., is refusing to contribute to the termination fee, said a person briefed on the matter."

Acxiom announced its plans to sell out and go private in May. It has yet to set a date for a shareholders meeting to approve the deal. Last week, its per share price fell as other private equity buyouts appeared shaky. will update this story.



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