Acxiom's Hopes Of Another Offer Seem Dim (ACXM)

It is of little surprise that shares of Acxiom Corp. (NASDAQ:ACXM) are hitting new 52-week lows today.  That isn’t a first, but this after the fears have come true and the private equity acquisition is terminated.  Shares are down 24% at $15.05 on the day, well under the $18.75 to $28.25 trading range over the last 52-weeks.  ValueAct and Silver Lake were even able to negotiate a lower $65 million termination pact (under the $110 million stated at the merger announcement).  Both of these firms are astute in technology and turnaround growth plays.

Based upon current and forward P/E ratio’s this one still isn’t cheap yet.  That may keep a lid on any hopes of a rival bid or white knight coming in.  The truth is that Acxiom has been crushed as a stock now but it doesn’t really need a white knight.  Shareholders won’t agree with this at all because now shares are at a two-year low.  Charles Morgan, its chairman and corporate leader has also announced that he will retire and search for a successor.  Shareholders might not be happy now, but they probably think a new leadership team may be in order.

If you look at the company, the first thing that comes to mind is the ability for unit separations down the road.  Acxiom’s own description is as follows: integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom’s innovative solutions are Customer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership.  Acxiom could quite easily end up being two or even more separate entities.  Just don’t expect it any time in the immdeiate future until new leadership can come in.

• We recently gave a list of deals that were at risk, and Acxiom was one of them.
• Here was a huge list of merger votes closing last week;
• If 3Com can be acquired maybe there is still hope;
• but a 43% drop in Q3 M&A may dim hopes.

You know that the market isn’t able to adequately factor in events on a permanent basis when you see this. If you have been a reader of our work or of others covering M&A, you would wonder why the market wasn’t able to price this in.

Jon C. Ogg
October 1, 2007

Jon Ogg can be reached at [email protected]; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.