CTPartners’ Stock Plummets; Korn Ferry Rumored As White Knight

March 27, 2015 – Shares of CTPartners plummeted on Thursday afternoon, dropping 30 percent at the end of a busy day on Wall Street which saw volume in the stock soar to 543,000 shares traded. It was the single largest, one-day decline in CTPartners’ share price since late January when the company’s stock was in a freefall on news of multiple financial restatements, the suspension of a planned common stock offering, and news of an EEOC discrimination lawsuit that was set to hit the company. On the day, CTPartners closed at $4.26 per share – nine cents lower than where it traded on January 29. The company’s market cap now stands at just $31 million; by comparison industry leader Korn Ferry has a market cap of $1.6 billion, with Heidrick & Struggles hovering at about $450 million. Just weeks ago CTPartners’ chairman and CEO, Brian Sullivan, resigned and since his departure three vice chairmen have exited the firm for larger, more stable rivals, taking with them key accounts and millions of dollars in fees. A number of other recruiters have also left the company as news that important financial services clients have started to take their business to competitors surfaced in recent days. CTPartners will report its financial results for the fourth quarter ended on December 31, 2014 on Tuesday, March 31 after the market closes. Hunt Scanlon Media estimates the firm will post global revenues of $172 million, a 32 percent gain, with its U.S./Americas regional sector posting $116.2 million, up 28 percent. “Watching this mess unfold, it has been difficult to see how a company that was performing this well could run into such trouble so quickly,” said Scott A. Scanlon, founding chairman and CEO of recruiting industry market research firm Hunt Scanlon Media. Mr. Scanlon said the latest rumor swirling around CTPartners was one that he didn’t seem to think had much logic attached to it: Korn Ferry has surfaced as an interested buyer. “This scenario would pit the nation’s No. 1 recruiter against its No. 6 rival, DHR International, which weeks ago offered $61 million for CTPartners,” said Mr. Scanlon. To date, he said, DHR has not had any of its acquisition overtures acknowledged and the firm is said to be exploring its legal options (DHR is a major shareholder in the company) as the clock ticks down. “I still think the best fit remains with DHR. Culturally, geographically, even by sector specialization – these two firms fit like a glove,” said Mr. Scanlon. “But no matter which way it goes, next Tuesday is an important day all the way around to watch CTPartners reveal its financial health and to see how the drama unfolds.”

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