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Terms of FNF, FNIS merger agreement announced.

Fidelity National Financial, Inc., a Fortune 500 provider of products, services and solutions to the real estate and financial services industries and Fidelity National Information Solutions, Inc. announced terms of the merger agreement whereby FNF will acquire all of the outstanding stock of FNIS that it does not currently own. FNF currently owns approximately 66% of the outstanding stock of FNIS.

Under the terms of the merger agreement, each share of FNIS common stock will be exchanged for a share exchange ratio of 0.830 shares of FNF common stock.

Based on the closing price of $31.54 for FNF's common stock on July 10, the implied per share consideration is $26.18 per share of FNIS common stock.

The merger agreement provides for a $29 cap on the implied per share consideration for each share of FNIS common stock.

Also, if the implied per share consideration for each share of FNIS common stock falls below a floor of $19, FNF has the right to adjust the share exchange ratio to maintain an implied $19 per share consideration for each share of FNIS common stock. If FNF does not exercise this right, FNIS has the right to not proceed with the closing of the merger.

The transaction is expected to qualify as a tax-free reorganization under the internal revenue code.

The merger agreement was approved by the board of directors of FNIS, following the recommendation of a special committee of the FNIS board of directors, and by the board of directors of FNF, following the recommendation of a special committee of the FNF board of directors.

Both the FNF and FNIS special committees of the board of directors received fairness opinions from their respective investment banking financial advisors.

The merger is subject to FNIS stockholder approval. FNF is the majority stockholder of FNIS, owning approximately 66% of the outstanding stock of FNIS, and FNF has agreed that it will vote in favor of the merger. FNF stockholder approval is required to amend the FNF Restated Certificate of Incorporation to increase the authorized shares of common stock from 150 to 250 million to allow for the issuance of new shares of FNF common stock to holders of FNIS common stock in the merger.

Because the merger of FNIS and FNF will require the exchange of outstanding stock options between entities under common control, the combined companies will be required to record a compensation expense equal to the difference between the aggregate exercise prices and intrinsic value of vested FNIS stock options on the date the merger closes.

To reduce the stock options outstanding at the date of merger, certain affiliated parties of FNIS are expected to volunteer to exercise 50% of their FNIS stock options at their original strike prices and then sell the underlying FNIS shares to unaffiliated third parties pursuant to Rule 144 or in private placements.

The merger is also subject to the receipt of any required governmental and regulatory approvals. The companies expect the merger to close late in the third quarter or early in the fourth quarter of 2003.
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Title Annotation:Fidelity National Financial, Inc., and Fidelity National Information Solutions, Inc.
Publication:Real Estate Weekly
Geographic Code:1USA
Date:Jul 23, 2003
Words:513
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