This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Deal: Fidelity National Jumps on FTC Approval for Lender Processing

Stocks in this article: LPSFNF

NEW YORK (TheStreet) -- The Federal Trade Commission this week cleared the $2.9 billion acquisition of Lender Processing Services  (LPS) by Fidelity National Financial  (FNF) with conditions.

On Thursday, Fidelity National was gaining 1% to $33.26 while Lender Processing was little changed at $37.61.

The FTC determined that the combination of Fidelity, of Jacksonville, Fla., and Lender Processing, also based in Jacksonville, would likely substantially lessen competition in several local markets in Oregon.

Fidelity provides mortgage services and is the largest title insurance underwriter in the U.S. Lender Processing operates in two segments, technology, data, and analytics; and transaction services. Its technology, data, and analytics segment offers software and information systems for processing mortgages. The transaction services segment offers outsourced processing of settlement, default management and title agency services.

Regarding its antitrust review of the merger, the FTC said that to preserve competition a proposed settlement requires Fidelity to sell a copy of Lender Processing's title plants in six Oregon counties and an ownership interest equivalent to Lender Processing's share of a jointly owned title plant in the Portland, Oregon, metropolitan area.

Title plants are databases used by abstractors, title insurers, title insurance agents and others to determine the title status of real property.

According to the FTC's complaint, the proposed combination otherwise is likely to substantially lessen competition, in violation of U.S. antitrust laws, the relevant markets where Oregon law requires title insurers to own an interest in a title plant in counties where they issue policies, which creates a barrier to entry for new providers of title insurance underwriting. The merger would eliminate one of only a few available title plants in six Oregon counties, making it possible for Fidelity and only one other underwriter to exclude competing firms from having an interest in a joint title plant in the Portland metropolitan area.

The consent order requires Fidelity to sell a copy of Lender Processing's title plants serving the Oregon counties of Clatsop, Columbia, Coos, Josephine, Polk and Tillamook within five months of the deal close, as well as an ownership interest in the Portland area to an FTC-approved buyer within the same period.

The commission vote on the consent order was 3-1, with Commissioner Joshua D. Wright voting no. The commission issued a separate statement and Commissioner Wright issued a dissenting statement. In his dissent, Wright determined that there was insufficient evidence to show that the merger would lessen competition for title information services in the Oregon markets.

The May 28 merger agreement, as amended, calls for Fidelity National to issue Lender Processing shareholders 0.20197 of a Fidelity National shares and $28.10 in cash. The deal is also subject to a collar such that if based on a 10-day pricing period ending on the third day before the deal close, Fidelity National average over $26.76 then Lending Processing shareholders would receive additional shares under the original stock exchange ratio of 0.65224 to make up that difference in price. --by Scott Stuart in New York

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs