UPDATED: Acxiom, ValueAct Reach Deal; Ubben to Join Board of Directors

by James Gordon  on Monday, Aug. 7, 2006 8:31 am  

Acxiom Corp.'s Charles Morgan has a reached a deal with ValueAct Capital Partners' Jeffrey Ubben, above, to have Ubben sit on Acxiom's board.

Acxiom Corp. and ValueAct Capital on Monday announced an end to the yearlong proxy fight between the Little Rock data-mining company and the San Francisco hedge fund.

Under an agreement reached over the weekend, Jeffrey Ubben, the ValueAct managing partner at the forefront of the battle, will immediately join Acxiom's board of directors. Ubben will become a member of the board's corporate governance committee and the newly created finance committee.

Shares of Acxiom (Nasdaq: ACXM) were trading up 40 cents to $24.89 on Monday after closing at $24.49 on Friday.

"Jeff Ubben and I agree that the best way for us to achieve our shared objective - delivering significant long-term value for all Acxiom shareholders - is to work together," said Charles Morgan, Acxiom's company leader. "I am pleased Jeff is joining the Acxiom board and am confident his contributions in the boardroom will help us accelerate the momentum that I believe has clearly been building in our business."

(Click here to see a document on the deal filed with the Securities & Exchange Commission.)

"ValueAct Capital has been invested in Acxiom since 2003, and today is the company's largest shareholder, because we understand the value the company delivers and its competitive advantage in the marketplace and are committed to helping it deliver even greater value," Ubben said.

"I am pleased to join the Acxiom board and look forward to working actively and constructively with Charles, the other members of the board and the senior leadership team to help deliver significant long-term value to all Acxiom shareholders."

ValueAct's 2 Board Members

In addition, a second yet-to-be-determined ValueAct-selected candidate for the Acxiom board will be nominated for a two-year term, increasing the size of the company's board of directors to 11.

Ubben and the second candidate will be eligible for election to three-year terms in 2008.

In exchange, ValueAct has agreed to withdraw its three-person slate of nominees from the upcoming board of director elections and will vote its shares in favor of Acxiom's nominees: chairman and company leader Charles D. Morgan, Ann Die Hasselmo and William J. Henderson.

Meanwhile, Acxiom has added Michael Durham to its slate of nominees. Durham was appointed to the board in March to replace Harry Gambill, who resigned in February. In order to keep the board's classes as close in size as possible as required by the company's bylaws, Durham has resigned as member whose term expired in 2008 and was re-appointed by the board as a member whose term expires in 2006.

A 'Win Win'

In a research brief on Monday, Stephens Inc. analyst Brad Eichler called the agreement between Acxiom and ValueAct a "win win" for both companies.

"At this time we are unsure as to who Value Act will nominate," Eichler wrote. "While we see [ValueAct's] contribution to the board as a positive, it will also likely restrict its ability to transact in the stock prospectively."

Eichler reiterated Stephens' "overweight" rating on Acxiom shares and $28-per-share target price.

"From our perspective this agreement facilitates change on [Acxiom's] board without any disruption to management and/or customer relationships and provides a means for shorter-term oriented shareholders to have liquidity at attractive prices," Eichler wrote.

Another observer, Kevane Wong, vice president at JMP Securities and senior analyst of data information services, said the agreement was just the compromise Acxiom shareholders were looking for.

Wong said Acxiom's recent earnings results — the best first quarter in the history of the company by most measures — might have taken the steam out of ValueAct's agenda.

"Right or wrong, if the numbers start improving, it's harder to get people to want to make changes," Wong said. But he added that Acxiom also had to make some concessions because ValueAct made "good points [regarding] how cash flow is presented, etc."

"[Acxiom] management had said on a recent conference call that they had shareholders that have really hoped they could resolve this issue with ValueAct. This is clearly showing that they actually have, which is positive ... it takes away the side-show distraction," Wong said.

Going 'Dutch'

Acxiom today also announced:

• Its annual shareholders meeting will take place Wednesday, Sept. 27, in New York. The record date will be Tuesday, Aug. 8.

• A modified "Dutch auction" self-tender offer in which Acxiom will seek to repurchase $300 million in Acxiom shares in a range of $25 to $27 per share.

Morgan said he and Ubben agreed that the deal is the right decision for the company and its shareholders.

"Acxiom has been engaged in a substantial open-market share repurchase program for several years, and we view the modified Dutch auction as a good way to accelerate repurchases of our stock and return capital to our shareholders," Morgan said.

More on Acxiom and Ubben

Morgan: Share Price for Acxiom Buy Doesn't Reflect Value

UPDATED: ValueAct Moves Forward With Acxiom Takeover Bid

Layoffs, Takeover Bid, Trial Ensure Acxiom's Place in Headlines

Ubben: Acxiom Wasn't Receptive to Change

ValueAct Boss Prepares for New Acxiom

Acxiom Board Again Rejects ValueAct Bid

UPDATED: ValueAct Plans Tender Offer for More Acxiom Stock

Acxiom's Morgan Responds to Ubben in New Letter

And click here to search the archives for more on Acxiom and ValueAct.



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