Fidelity National Financial,
Inc. FNF, a leading provider of title insurance, mortgage services and
diversified services, today announced that it was exercising its option to
further adjust the consideration mix in the previously announced merger with
Lender Processing Services, Inc. LPS by increasing the cash component
of the total consideration by approximately $511 million and correspondingly
decreasing the stock component of the total consideration by an equal amount.
The total consideration will be unchanged.
Based on today's announcement, FNF will now pay approximately 82% of the total
consideration for the LPS shares of common stock in cash and 18% in shares of
FNF common stock, subject to adjustment as described in the definitive
agreement and below.
On May 28, 2013, FNF signed a definitive agreement under which FNF will
acquire all of the outstanding stock of LPS for $33.25 per common share, for a
total equity value of approximately $2.9 billion. The consideration was to be
paid 50% in cash and 50% in common stock of FNF.
On June 19, 2013, FNF announced an adjustment to the consideration mix by
increasing the cash component of the total consideration by approximately $500
million and correspondingly decreasing the stock component of the total
consideration by an equal amount. Based on that June 19, 2013 announcement,
FNF was to pay approximately 67% of the total consideration for the LPS shares
of common stock in cash and 33% in shares of FNF common stock, subject to
adjustment as described in the definitive agreement and below.
Under the terms of the merger agreement, LPS stockholders currently have the
right to receive a certain number of shares of our common stock equal to a
stated exchange ratio and $22.303 in cash, without interest, for each share of
LPS common stock that they own. FNF has the option, pursuant to the merger
agreement, to increase the cash portion of the per share merger consideration
by up to $16.625 with a corresponding decrease in the stock portion of the
merger consideration by providing written notice (referred to as the
"adjustment notice") to LPS on or before the date that is three trading days
prior to the anticipated effective date of the proxy statement/prospectus
related to the merger. In connection with the previously announced equity
offering, FNF has provided such an adjustment notice to LPS to further
increase the cash portion of the per share merger consideration in an amount
equal to $5.799 and to correspondingly decrease the stock portion of the
merger consideration. As a result, subject to the terms and conditions of the
merger agreement, and assuming consummation of the previously announced equity
offering and the receipt of approximately $511 million in net proceeds
therefrom, including the exercise of the over-allotment option, LPS
stockholders will have the right to receive a certain number of shares of our
common stock equal to the exchange ratio further discussed below and
$28.102 in cash, without interest, for each share of LPS common stock that
they own. If the average of the volume weighted averages of the trading prices
of our common stock during the ten trading day period ending on (and
including) the third trading day prior to the closing of the merger (the
"average FNF stock price") is greater than $26.763, then the exchange ratio
will be an amount equal to the quotient of (a) (x) the product of (1) 0.65224
multiplied by (2) the average FNF stock price minus (y) $11.477 divided by (b)
the average FNF stock price. If the average FNF stock price is between $24.215
and $26.763, then the exchange ratio will be fixed at 0.20197. If the average
FNF stock price is between $20.000 and $24.215, then the exchange ratio will
adjust so that the value of the stock portion of the merger consideration is
fixed (based on the average FNF stock price) at $4.891 per share of LPS common
stock. If the average FNF stock price is less than $20.000, then the exchange
ratio will be fixed at 0.24455. As a result of FNF's election to further
increase the cash component of the merger consideration and correspondingly
decrease the stock component of the merger consideration, the transaction no
longer requires the approval of FNF stockholders.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in