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Servicing / The Ticker

Fidelity National Financial adjusts terms of LPS acquisition

frozen money

Residential mortgage services provider Fidelity National Financial Inc. (FNF) has adjusted the terms of its planned acquisition of Lender Processing Services (LPS).

LPS noted Friday that FNF plans to adjust the cash and stock component of the consideration it pays to close the deal. In a press release, LPS noted that FNF hopes to increase the cash component of what it pays by $511 million and decrease the stock component by an equal amount.

The previously announced public offering was for 17.2 million shares of common stock at a price of $26.75 a share.

LPS noted that if the FNF equity offering is not finalized, FNF "will increase the cash component of the total consideration by approximately $12 million and correspondingly decrease the stock component of the total consideration by an equal amount."

Back in May, LPS signed an agreement, accepting FNF’s offer to acquire the outstanding stock of LPS for $33.25 a share for a total value of $2.9 billion.

In June, FNF told LPS it would exercise its option to increase the cash component of the consideration paid from $16.625 a share of LPS stock to $22.302 a share of LPS common stock, while decreasing the stock component of the amount paid.

"Based on today's announcement, if FNF's average common stock price at closing is greater than $26.763, the exchange ratio will be adjusted to reflect the increased value that would have been received at closing without today's increase in the cash consideration," LPS wrote.

"Assuming the FNF Equity Offering is consummated, if FNF's average common stock price at closing is greater than $24.215 but less than $26.763, the exchange ratio remains fixed at 0.20197 per share of LPS common stock."

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