RL Polk Investors Sue over $67m Buyback 'Loss'

Former investors in automotive researcher R.L. Polk & Co. have launched a putative class action claiming that the company's controlling shareholders gave them insufficient information at the time of a 2011 share buyback program.

After buying back shares at a price of $810 the company went on to issue a special dividend, and has since been sold to US information and analytics firm IHS for $1.4bn or $2,675 per share, valuing the company at more than three times the tender price. The suit, filed in Delaware Chancery Court, claims the controlling shareholders breached their fiduciary duties by not giving more information about these future plans, and suggests that investors missed out on close to $67m.

Investors Buttonwood Tree Value Partners LP and Mitchell Partners LP claim that by these actions / omissions, 'the controlling shareholders deprived those who tendered their shares into the self-tender of the ability to participate in the sale and special dividend' - and the suit suggests that the controlling shareholders - including members of the Polk family, who owned more than 93% of the company, gained nearly $62.5m accordingly.

IHS says it 'does not comment on pending litigation'.

Polk is divided into two divisions: vehicle history information service CARFAX, which now provides about 60% of revenue; and Polk, which provides mission-critical market data, analysis and tools for a broad range of automotive areas. The two have separate web sites at www.polk.com and www.carfax.com .