FIS looks to recapitalisation deal after PE firms drop bid

FIS looks to recapitalisation deal after PE firms drop bid

The consortium of private equity firms circling financial software house FIS have dropped their proposed $15 billion bid for the firm. FIS has issued a statement saying it is instead looking into a proposed leveraged buyout as well as leveraged recapitalisation with a share repurchase.

Earlier this month the banking and payment technology giant - formerly called Fidelity National Information Services - emerged as a target for a leveraged buyout by Blackstone and existing stakeholder Thomas H Lee Partners and TPG Capital.

The PE firms are understood to have offered more than $15 billion, or around $32 a share, in what would have been the biggest leveraged buyout in nearly three years.

However, yesterday reports surfaced claiming that talks had broken down after the FIS board demanded more money, prompting shares to tumble nearly eight per cent in after-hours trading.

In a statement responding to the speculation, FIS has confirmed that buyout talks have ended and it is now ready to "pursue a leveraged recapitalization with a substantial share repurchase".

The vendor says it posted revenue of $1.25 billion, net earnings from continuing operations of $94.7 million and cash flow from operations of $271.6 million for the first quarter, all of which exceeded expectations. It also claims the integration of Metavante, acquired last year, is on-track.

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