In the News
Blackstone’s Fidelity Offer May Exceed $15 Billion (Update1)
By Zachary R. Mider and Jason Kelly
May 12 (Bloomberg) -- Blackstone Group LP, Thomas H. Lee Partners LP and TPG Capital are in talks to pay more than $15 billion including debt for Fidelity National Information Services Inc., said a person with knowledge of the matter.
The offer would value Fidelity National Information at about $32 a share, the person said, speaking on condition of anonymity because the discussions are private. An agreement may be reached as soon as May 16 if talks don’t collapse, said the person. Marcia Danzeisen, a spokeswoman for Fidelity National, didn’t return a call after regular business hours yesterday.
A $15 billion deal would be about three times as big as the largest leveraged buyout since the credit markets crumbled in July 2007, showing how private-equity firms are again putting capital to work after more than a two-year drought in transactions. LBO funds worldwide have about $500 billion of unspent committed capital, according to researcher Preqin Ltd.
"Times have changed," said Paul Schaye, managing partner of New York-based Chestnut Hill Partners, which helps private- equity firms find investments. "The market can support this type of deal and this type of structure right now."
Other private-equity firms have recently held talks about joining the group bidding for Fidelity National Information, said two people with knowledge of the matter. With banks preparing about $10 billion in debt financing, the private- equity group would have to put up more than $5 billion, one of the people said.
Private-equity firms announced about $24 billion of company takeovers so far this year, compared with $5.7 billion during the same period in 2009.
Financing Group
For Fidelity National Information, a Jacksonville, Florida- based payment-processing company, a deal in the $32 a share range would represent more than a 20 percent premium to the $26 closing stock price on May 5, the last day before the Wall Street Journal reported the company was in buyout talks.
The shares rose $1.38, or 4.8 percent, to $30.24 at 9:30 a.m. in New York Stock Exchange composite trading.
Bank of America Corp., Barclays Plc, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG and JPMorgan Chase & Co. are among the banks that have been working on financing the takeover, said other people with knowledge of the matter.
Credit-market turmoil in 2007 led banks to pull back on leveraged loans used to finance buyouts. Since July of that year, the largest LBO was that of IMS Health Inc., acquired in February for about $5 billion including debt.
$2.9 Billion Debt
Fidelity National Information had about $2.9 billion of net debt and noncontrolling interest as of March 31, according to data compiled by Bloomberg. With about 377 million shares outstanding as of April 30, a deal at $32 a share would value the company’s stock at $12.1 billion.
Thomas H. Lee, also known as THL Partners, already owns about 4.4 percent of Fidelity National, according to data compiled by Bloomberg. Private-equity firm Warburg Pincus is the company’s largest shareholder, with about 11 percent.
Fidelity National Information processes payments and issues cards for more than 14,000 institutions globally. The company had profit of $105.9 million in 2009 on revenue of $3.77 billion.
Spokesmen for Blackstone, THL, and TPG declined to comment or didn’t immediately respond to calls seeking comment.
--With assistance from Serena Saitto in New York. Editors: Josh Friedman, Christian Baumgaertel.
To contact the reporters on this story: Zachary Mider in New York at zmider1@bloomberg.net; Jason Kelly in New York at jkelly14@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net