Vantiv, Inc. VNTV recently priced a secondary offering of 12,454,545
shares of Class A Common Stock being sold on behalf of Fifth Third FITB. This sale would represent approximately 15 percent of our ownership
position in Vantiv (excluding the warrant noted below). As previously
communicated, our purpose in the sale is to begin the process of monetizing
the remaining portion of our stake in Vantiv in a considered, orderly fashion
over time.
Upon the settlement of this transaction, we would expect to recognize a
pre-tax gain of approximately $140 million (approximately $91 million
after-tax) during the fourth quarter of 2012. Following the settlement, Fifth
Third would continue to hold approximately 71.5 million Class B units of
Vantiv Holding, LLC which may be exchanged for Class A common stock of Vantiv,
Inc. on a one-for-one basis, as well as a warrant that is exercisable and
exchangeable into Vantiv Inc. Class A Common Stock. These securities are
subject to certain terms and restrictions. Fifth Third would have a remaining
economic interest of approximately 33.6 percent of Vantiv's future earnings
(before consideration of the potential impact of an exercise of the
underwriters' overallotment option, as discussed below). Our interest is
accounted for under the equity method.
The underwriters of the offering have been granted an option, solely to cover
over-allotments and exercisable for 30 days from the date of pricing, to
purchase up to an additional 1,245,455 shares of Class A Common Stock of
Vantiv, Inc. at the share price of our sale. If exercised, we would expect any
such action to change the impacts to Fifth Third caused by the initial sale,
with any such changes limited to no more than 10 percent of the initial
impact. Any additional gains would be recognizable in the quarter in which the
option was exercised.
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