A Las Vegas company led by Golden Knights owner Bill Foley says it plans to use at least $460 million to send money back to shareholders and retire debt, after a hedge fund took aim at the firm.
Cannae Holdings said Monday that it would use proceeds from the recently announced sale of one of its portfolio companies to fund the moves. It expects to buy back at least $300 million of its stock, spend $60 million on quarterly dividends and repay $101 million of outstanding debt.
The portfolio company, business-data firm Dun & Bradstreet Holdings, is being acquired by investment firm Clearlake Capital Group in a deal valued at $7.7 billion. Under the terms, Dun & Bradstreet stockholders will receive $9.15 per share.
The deal, announced last week, is expected to close in the third quarter.
Cannae, which buys stakes in operating businesses, said Monday that it holds about 69 million shares in Dun & Bradstreet, representing more than $630 million in expected cash proceeds.
Foley, the chairman, CEO and chief investment officer of Cannae and one of its biggest stockholders, said that his company’s spending plan and other actions taken over the past year-plus will “drive significant value” for shareholders.
The announcement comes after East Coast hedge fund Carronade Capital Management on March 20 unveiled a big stake in Cannae and said the holding company should slash costs, improve capital allocation and establish corporate accountability with “truly independent directors.”
The Connecticut-based investment firm nominated four new members for Cannae’s board, arguing that Cannae’s shareholders are seeing underperforming returns and that the board has a “high degree of interconnectedness.”
Cannae issued a response the same day, saying it had already taken significant steps for long-term value creation.
The firm said its strategy includes returning capital to shareholders, rebalancing its investment portfolio toward private companies with cash flow, and improving its portfolio companies’ operations.
“We have made strong progress across all three areas of focus,” Cannae said, adding it believes its strategy will “deliver better long-term returns to our shareholders” than the moves proposed by Carronade.
Contact Eli Segall at [email protected] or 702-383-0342.
