Fidelity National likely unaffected by blocked Stewart deal, says Piper Jaffray.
Piper Jaffray analyst Jason Deleeuw expects shares of Fidelity National Financial (FNF) to trade lower today after the New York State Department of Financial Services provided written notice of its disapproval of the company's application to acquire control of Stewart (STC). The analyst thinks the combined company's market share is the concern for the NYDFS. Deleeuw, however, does not believe a lot of Stewart accretion was priced into Fidelity National's valuation. In addition, the analyst thinks Fidelity's business will likely unaffected by a blocked Stewart deal. We don't see any business risk to Fidelity if the deal is blocked, as its operations should be unaffected, Deleeuw tells investors in a research note. He points out that Fidelity National would pay a $50M break-up fee to Stewart if the deal falls through for regulatory purposes. The analyst believes the company has not heard from the Federal Trade Commission or the Texas state regulators regarding the deal. Shares of Fidelity National Financial are down 2% to $35.67 in early trading while Stewart is down 7% to $41.88.