FNF and FNIS sign merger deal
27 June 2006 | 1787 views | 0
Source: Fidelity National Financial
Fidelity National Financial, Inc. (NYSE: FNF) and Fidelity National Information Services, Inc. (NYSE: FIS) today announced that they have signed an Agreement and Plan of Merger (Merger Agreement) under which FNF will be merged with and into FIS.
Upon the consummation of the merger, FNF's separate corporate existence will cease and FIS will continue as the surviving corporation. Closing of the merger is expected early in the fourth quarter of 2006.
The previously announced merger will be consummated immediately after the closing under the Securities Exchange and Distribution Agreement entered into today by FNF and Fidelity National Title Group, Inc. (NYSE: FNT), which contemplates the contribution of substantially all of FNF's assets and liabilities, other than its ownership interest in FIS, to FNT in exchange for shares of FNT's Class A Common Stock. Immediately following that transaction, FNF will convert its Class B Common Stock of FNT into shares of FNT Class A Common Stock and then distribute all of the shares of FNT Class A Common Stock it holds as a dividend to FNF stockholders. This spin-off dividend is subject to, among other things, receipt of an IRS private letter ruling with respect to the tax-free treatment for both FNF and its stockholders. These transactions will leave FNF with an approximately 51% ownership position in FIS as its only asset prior to the merger with FIS.
Under the terms of the Merger Agreement, each share of FNF common stock issued and outstanding immediately prior to the merger will be converted into the right to receive that number of shares of FIS common stock equal to the 96,214,500 shares of FIS that FNF currently owns divided by the aggregate number of shares of FNF common stock issued and outstanding immediately prior to the merger (Conversion Number). There is no premium or discount associated with the Conversion Number.
In connection with the proposed transaction, William P. Foley, II will become Executive Chairman of FIS, Alan L. Stinson will become its Executive Vice President of Finance and Brent B. Bickett will become Executive Vice President -- Strategic Planning. Approximately 2.8 million options to purchase FNF common stock that are held by persons who will become FIS employees will be replaced at their intrinsic value by FIS options having the same terms and vesting provisions.
The Boards of Directors of FNF and FIS each approved the transaction contemplated by the Merger Agreement after receiving the recommendation of a special committee of independent members of their respective boards.
The merger of FNF and FIS will require FNF shareholder approval and the issuance of FIS stock in connection with the merger and certain other items related to the transaction will require FIS shareholder approval. Accordingly, as soon as practicable, both FNF and FIS will prepare and file with the Securities and Exchange Commission (SEC) a Proxy/Information Statement relating to required shareholder approvals and will prepare and file a Registration Statement on Form S-4, with the Proxy/Information Statement included as a prospectus, relating to the issuance of FIS stock in the merger. Once the Proxy/Information Statement is cleared and the FIS Form S-4 is declared effective by the SEC, FNF and FIS will schedule shareholder votes and mail the Proxy/Information Statement to their shareholders.
Completion of the transaction will be subject to a number of conditions, including: approval of the shareholders of each of FNF, FNT (as to its issuance of shares to FNF) and FIS; the receipt of a private letter ruling from the Internal Revenue Service and opinions from FNF's and FIS' tax advisors; the clearance of proxy statements by the SEC and effectiveness of registration statements; the receipt of all necessary regulatory approvals for the merger; the receipt of any necessary approvals under credit agreements of FNF, FNT and FIS and any other material agreements; the occurrence of the spin-off dividend in accordance with the Securities Exchange and Distribution Agreement; and the other conditions set forth in the Merger Agreement. There can be no assurance that any or all of these conditions will be satisfied or that the transactions will be completed.