Fidelity National says buyout talks end
Fidelity National Information Services Inc confirmed that talks regarding the sale of the company have ended, and the payment processor will now go for a leveraged recapitalization with a substantial share buyback.
A consortium bidding for Fidelity National on Monday pulled out because of disagreement over price, derailing what would have been the biggest buyout since the credit crisis, sources told Reuters.
Leveraged recap typically sees a company leveraging itself up in order to pay a dividend to shareholders or to buy its own shares. Such a process raises shareholder return without an outright sale, although it does come with a lot of risk.
A leveraged buyout for payment processing firm Fidelity could have been worth around $15 billion and would have heralded the return of mega-buyouts after a three-year drought.
Blackstone Group LP , TPG Capital LP and Thomas H. Lee Partners were in talks to buy the company, valued at around $11 billion with $3 billion of debt, for about $32 a share, sources said.
Fidelity shares dropped as much as 8 percent to $26.30 before the bell. The shares, which have rallied since talks of a buyout first surfaced, closed at $28.88 Monday on the New York Stock Exchange.
(Reporting by Anurag Kotoky in Bangalore; Editing by Ratul Ray Chaudhuri)
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