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FILING PURSUANT TO RULE 425
FILER: FIDELITY NATIONAL TITLE GROUP, INC.
SUBJECT COMPANY: FIDELITY NATIONAL FINANCIAL, INC.
FIDELITY
NATIONAL TITLE GROUP, INC.
COMMISSION FILE NO. 1-32630
1-09396 |
Fidelity National Financial, Inc. and Fidelity National Title Group, Inc. Announce the
Signing of a Securities Exchange and Distribution Agreement
Jacksonville, Fla. (June 26, 2006) Fidelity National Financial, Inc. (NYSE:FNF) and
Fidelity National Title Group, Inc. (NYSE:FNT) today announced that they have signed a Securities
Exchange and Distribution Agreement which contemplates the contribution of substantially all of
FNFs assets and liabilities, other than its ownership interest in Fidelity National Information
Services, Inc. (NYSE:FIS), to FNT in exchange for shares of FNTs Class A Common Stock.
Immediately following this 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. Closing of the transactions is expected early in the fourth
quarter of 2006
Under the terms of the Securities Exchange and Distribution Agreement, FNT will obtain FNFs
Specialty Insurance businesses, its interest in Sedgwick CMS, Inc. and related businesses and
other assets currently owned by FNF (the FNF Assets). As consideration, FNT will issue to FNF
a number of shares of FNT Class A Common Stock equal to (i) 34,042,553 plus (ii) the amount of
cash included in the FNF Assets, not to exceed $275 million for the purposes of the calculation,
divided by $23.50. At the anticipated amount of cash of $275 million, FNT will issue 45,744,680
shares of FNT Class A Common Stock to FNF. Combined with FNFs 143,176,041 shares of FNT Class B
Common Stock that will be converted into FNT Class A Common Stock, FNF anticipates distributing a
total of 188,920,721 shares of FNT Class A Common Stock as a dividend to FNF stockholders. Any
future acquisitions in the Specialty Insurance businesses, Sedgwick CMS, Inc. and related
businesses or other acquisitions that are
consummated before the closing of the contribution of the FNF Assets from FNF to FNT will be
included in the FNF Assets to be contributed to FNT. The value of any additional assets acquired
by FNF will not impact the total consideration to be paid by FNT for the FNF Assets as any
additional acquired assets would reduce the cash component of other assets or would be funded
through borrowings at the respective operating subsidiary.
In connection with the proposed transaction, William P. Foley, II will become the Chief
Executive Officer of FNT and Alan L. Stinson will become its Chief Operating Officer.
Approximately 6.5 million options to purchase FNF stock that are held by persons who will become
FNT employees will be replaced at their intrinsic value with FNT options having the same terms
and provisions.
FNF and FIS also announced today that they have agreed to merge, effective immediately after
the completion of FNFs spin-off of FNT. Following this merger, FNT will change its name to
Fidelity National Financial, Inc. and it is expected that its NYSE ticker symbol will change to
FNF.
The Boards of Directors of FNF and FNT each approved the transactions contemplated by the
Securities Exchange and Distribution Agreement after receiving the recommendation of a special
committee of independent members of their respective boards.
The issuance of FNT stock as consideration for the purchase of the FNF Assets, and certain
other items in connection with the transaction, will require FNT shareholder approval.
Accordingly, as soon as practicable, FNT, in consultation with FNF, will prepare and file with
the Securities and Exchange Commission (SEC) an Information Statement relating to required
shareholder approvals. Once the Information Statement is cleared by the SEC, and the SEC
filings by FNF and FIS for the FIS merger are cleared, FNT will schedule a shareholder vote and
mail the Information Statement to its shareholders.
Completion of the transactions will be subject to a number of conditions, including but not
limited to: approval of the shareholders of each of FNF, FNT and FIS; the receipt of a private
letter ruling from the Internal Revenue Service; the clearance of Proxy and Information
Statements by the SEC; the receipt of all necessary regulatory approvals for the transfer
of FNFs Specialty Insurance operations to FNT and for the spin-off of FNTs insurance
operations; the receipt of necessary approvals under credit agreements of FNF, FNT and FIS and
any other material agreements; and the other conditions set forth in the Securities Exchange and
Distribution Agreement and in the merger agreement for the FIS merger. There can be no
assurance that any or all of these conditions will be satisfied or that the transactions will be
completed.
Fidelity National Financial, Inc. (NYSE:FNF), number 248 on the Fortune 500, is a provider
of outsourced products and services to a variety of industries. Through its majority-owned,
publicly-traded subsidiary, Fidelity National Title Group, Inc. (NYSE:FNT), FNF is one of the
nations largest title insurance companies, with nearly 29 percent national market share.
Through its majority-owned, publicly-traded subsidiary, Fidelity National Information Services,
Inc. (NYSE:FIS), FNF provides an industry leading suite of data processing, payment and risk
management services to financial institutions and retailers. Through its wholly-owned
subsidiaries, FNF is also a leading provider of specialty insurance products, including flood
insurance, homeowners insurance and home warranty insurance. Through its minority-owned
subsidiary, Sedgwick CMS, FNF is a leading provider of outsourced insurance claims management
services to large corporate and public sector entities. More information about the FNF family of
companies can be found at www.fnf.com, www.fntg.com, www.fidelityinfoservices.com and
www.sedgwickcms.com.
FNT is one of the nations largest title insurance companies. The Companys title insurance
underwriters Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and
Alamo Title issue approximately 29 percent of all title insurance policies in the United
States. Through its direct operations and agencies, the Company provides title insurance in 49
states, the District of Columbia, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and Canada.
In 2005, FNT also acquired Service Link, a leading provider of title and closing services
to major financial institutions and lenders, including six of the top 10 lending
institutions in the United States ranked by loan origination volume.
This press release contains forward-looking statements that involve a number of risks and
uncertainties. Statements that are not historical facts, including statements about our beliefs
and expectations, are forward-looking statements. Forward-looking statements are based on FNF and
FNTs managements beliefs, as well as assumptions made by, and information currently available
to, management. Because such statements are based on expectations as to future economic
performance and are not statements of fact, actual results may differ materially from those
projected. FNF and FNT undertake no obligation to update any forward-looking statements, whether
as a result of new information, future events or otherwise. The risks and uncertainties which
forward-looking statements are subject to include, but are not limited to: the possibility that
the transactions described in this press release will not be completed, or will be completed in a
different form or with different effects on holders of the stock of FNF, FNT or FIS than
described, or will not be successful in achieving the goals targeted; changes in general
economic, business and political conditions, including changes in the financial markets; adverse
changes in the level of real estate activity, which may be caused by, among other things, high or
increasing interest rates, a limited supply of mortgage funding or a weak U. S. economy; FNFs
potential inability to find suitable acquisition candidates, acquisitions in lines of business
that will not necessarily be limited to FNFs traditional areas of focus, or difficulties in
integrating acquisitions; FNFs dependence on operating subsidiaries as a source of cash flow;
significant competition that FNFs operating subsidiaries face; compliance with extensive
government regulation of FNFs operating subsidiaries; regulatory investigations of the title
insurance industry; FNTs business concentration in the State of California, the source of over
20% of its title insurance premiums; FNTs dependence on distributions from its title insurance
underwriters as its main source of cash flow; competition from other title insurance companies;
and other risks detailed in the Statement Regarding Forward-Looking Information, Risk
Factors and other sections of the FNF and FNT Form 10-Ks and other filings with the
Securities and Exchange Commission.
This press release does not constitute an offer of any securities for sale. In connection
with the proposed transaction, FNT will file an information statement and may file a registration
statement and prospectus with the SEC. In addition, FNF will file a proxy statement with the SEC
in connections with its merger with FIS. INVESTORS ARE ADVISED TO READ THESE AND ALL RELATED
DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
may obtain a free copy of these materials when they become available from the SECs web site at
www.sec.gov. Free copies of these documents may also be obtained from FNT or FNF by directing a
request to either company at 601 Riverside Avenue, Jacksonville, FL, 32204, Attention: Corporate
Secretary.
FNF and its officers and directors may be deemed, under SEC rules, to be participants in the
solicitation of proxies from FNFs stockholders with respect to the FIS merger. A description of
any interests that any such participant may have in the merger will be available in the proxy
statement. Information concerning FNFs directors and executive officers is set forth in FNFs
annual report on Form 10-K/A filed with the SEC on May 1, 2006. These documents are available
free of charge at the SECs website at www.sec.gov or by going to FNFs Investor Relations page
on its corporate website at www.fnf.com.
SOURCES: Fidelity National Financial, Inc. and Fidelity National Title Group, Inc.
CONTACT: Daniel Kennedy Murphy, Senior Vice President, Finance and Investor Relations, Fidelity
National Financial, Inc., 904-854-8120, dkmurphy@fnf.com