Continues Tough Stand Against Research Firm's CEO

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CINCINNATI ( -- A major investor in Information Resources Inc. has been approached by four groups of potential strategic or financial buyers for the market research firm, according to the manager of a hedge fund that owns a major stake in the company.

Chapman Capital, which controls the Chap-Cap hedge fund, announced Monday in a filing with the U.S. Securities and Exchange Commission it has reduced its stake in IRI to 4.1%, after announcing it took a 5.6% stake Feb. 14.

Carry on negotiations
In an interview with, Robert L. Chapman, managing member of Chapman Capital, said he reduced holdings in IRI below 5% in order to carry on possible negotiations with potential acquirers without being subject to additional regulatory scrutiny.

In his February filing, Mr. Chapman demanded IRI either be sold or its chairman-CEO, Joseph Durrett, be fired after a stock plunge that has seen IRI trading near all-time lows since December. That's when Procter & Gamble Co., IRI's largest client, announced it would move its retail measurement account to rival VNU's ACNielsen Corp. as of July 1.

IRI announced in late February it

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had retained investment banking firm William Blair & Co., Chicago, to explore strategic options, though Mr. Durrett said in an interview at the time that Blair had been retained "several months" prior to Mr. Chapman's demands.

Four distinct groups
Mr. Chapman wouldn't characterize who the potential buyers are, other than to say he had been in talks with four distinct groups representing a mix of strategic and financial buyers.

He said interest in buying IRI is strong because of its $555 million in annual revenues combined with its under $50 million market capitalization.

But Mr. Chapman added: "The concern [among potential buyers] is do they have a broom big enough to clean up Durrett's mess?" An IRI spokeswoman had no immediate comment on the Mr. Chapman's intentions or his SEC filing.

Mr. Chapman added that some of the strategic buyers have some of the same customers as IRI, customers who have indicated "they don't want just one supplier [of consumer-panel and scanner data coverage of package-goods sales]."

Taylor Nelson Sofres, Ipsos
Among players potentially interested in at least parts of IRI, according to industry executives, would be U.K.-based Taylor Nelson Sofres and French research firm Ipsos. An executive familiar with the industry said a "European consortium" of marketing firms might also be interested. In his filing with the SEC, Mr. Chapman said he also had been approached about the possibility of swapping Chap-Cap's interest in IRI for interest in "another acquisition vehicle."

Mr. Durrett said no deadline has been set for completing a sale, partnership or other "capital infusion" for IRI, though he expects the process to take several months. But Mr. Chapman was more definitive on his expectations. "If nothing is done by the Fourth of July," he said, "there will be some more fireworks from investors."

"If Chapman should make his intentions known [about participating in an acquisition], we're exploring strategic options," an IRI spokeswoman said. "He can contact William Blair."

Changes to board
Mr. Chapman would not comment on whether he plans to seek to put any of his own representatives on IRI's board at its annual meeting in May. Four seats on the 10-member board are likely to be decided, including that of Mr. Durrett and Jeffrey Stamen, CEO of supply-chain software developer Syncra Systems, who has resigned, the IRI spokeswoman confirmed.

In his SEC filing, Mr. Chapman criticized IRI for not announcing Mr. Stamen's resignation and for consulting fees IRI has paid to board members Leonard Lodish and Thomas Wilson Jr., whom he said "seem to be the most intransigent supporters of Mr. Durrett" on the board. Mr. Chapman said he has spoken to all the board members except for Mr. Wilson, who did not return his calls; he also described Mr. Wilson as the board member most responsible for Mr. Durrett's hiring.

Messers. Lodish and Wilson could not be immediately reached for comment.

"Our board of directors has and will continue to serve in the interest of shareholders," the IRI spokeswoman said. "There's nothing unusual or improper in them leveraging their competence and expertise in special projects for IRI that they've done in the past."

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