The proposed sale of database provider Infogroup attracted new criticism from investors Monday after the Omaha firm disclosed more about what led to the deal with CCMP Capital Advisors.
Stonerise Capital Partners said it had sent a second letter to Infogroup's board objecting to the $460 million deal as ill-advised and underpriced.
Stonerise said the first-quarter earnings report Infogroup released last week shows the company is worth significantly more than the $8 per share CCMP is offering.
Infogroup said it made $7.3 million net income, or 13 cents per share, in the first quarter. That compares with a loss of $9.3 million, or 16 cents per share a year ago.
No date has been set for a shareholder vote on the deal that was announced in March.
Officials at Infogroup and New York-based CCMP declined to comment on the objections Monday.
Stonerise's managing partner Jose Medeiros said in his latest letter that he believes Infogroup founder Vinod Gupta forced the company's sale, so he could sell his stake, which includes more than 35 percent of Infogroup's stock.
Gupta agreed in March to pay more than $7.3 million to settle an SEC investigation into the way he used more than $9 million of Infogroup's money to support an extravagant lifestyle, including an 80-foot yacht, 28 club memberships, six homes and 20 automobiles.
"To accommodate one large and difficult shareholder in his quest for personal liquidity, the board has acted to the detriment of all other shareholders," Medeiros wrote.
San Francisco-based Stonerise said the data Infogroup cites to support the sale in documents filed with the Securities and Exchange Commission is deceptive. For instance, Infogroup compares the $8 per share offer to a two-year period of turmoil at the company because of the allegations against Gupta and volatility in the markets because of the recession.
Plus, Medeiros said Infogroup's board relied on overly conservative profit projections for the company when it agreed to the $8 per share price.
About five years ago, Gupta told shareholders he believed the stock was worth $18, but a few months later he offered to buy out the company for $11.75 a share, angering some shareholders.
Gupta was the chief executive and chairman of the company, which used to be known as InfoUSA, from 1992 through August 2008. He stepped down as part of a settlement of a shareholder lawsuit that alleged Infogroup misspent millions of dollars, some of it on domestic and international air travel for former President Bill Clinton and his wife, then-Sen. Hillary Rodham Clinton.
Stonerise and Infogroup's second-largest shareholder, Hotchkis and Wiley Capital Management, both sent letters last month objecting to the CCMP deal as underpriced after Infogroup announced it.
Stonerise has said it owns about 2.5 percent of Infogroup's stock. Los Angeles' Hotchkis and Wiley holds about 5.7 percent of the stock.
On the Net:
InfoGroup Inc.: http://www.infogroup.com
CCMP Capital Advisors LLC: http://www.ccmpcapital.com
Stonerise Capital Partners: http://www.stonerisecapital.com
Hotchkis and Wiley Capital Management: http://www.hwcm.com