FNF Sells $500 Million Stake In Subsidiary
By Daniel Hays
NU Online News Service, Dec. 9, 12:16 p.m. EST?Fidelity National Financial, a Jacksonville, Fla. title insurer, said it would sell a 25 percent interest in its information services unit to Texas Pacific Group and Thomas H. Lee Partners for $500 million.[@@]
The sale, to TPG of Fort Worth, Texas and Boston buyout firm Thomas H. Lee Partners, is part of a plan announced yesterday to recapitalize FNF's information subsidiary Fidelity National Information Services.
William Foley III, FNF chairman and chief executive officer, said today that selling a stake in FIS was seen as a better option than going public with FIS and spinning it off.
With an IPO and spinoff, he said, there "would be no ability to leverage management resources" from FNF and that there was as benefit in having FNF involved in operating FIS.
The company, which has signed a letter of intent for the sale, said it will result in a gain of approximately $375 million for FNF.
FNF said that when the recapitalization plan is completed it will pay a special $10 per share cash dividend to its stockholders. Mr. Foley said this will probably occur in the first quarter of 2005.
Recapitalization of the FIS unit will include entering into $2.8 billion in senior secured credit facilities, the company said.
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