Fidelity National to Buy Chicago Title

Fidelity National Financial Inc., Irvine, Calif., has signed a definitive agreement to purchase Chicago Title Corp. for approximately $1.2 billion in roughly equal amounts of cash and stock.The allocation between cash and stock will be adjusted so that Chicago Title's stockholders will receive more than 50% of the outstanding stock of the new company, Fidelity National said. The stock price, $52 per share of Chicago Title common stock, represents a 42% premium to the closing price on July 29. The price is payable in Fidelity National shares or, upon election by Chicago Title stockholders, in cash (subject to proration as necessary to achieve the prescribed allocation). Morgan Stanley Dean Witter advised Fidelity National in the transaction and Merrill Lynch advised Chicago Title. The agreement has been approved by the boards of both companies, and is subject to approval by both companies' stockholders and the requisite regulatory authorities. It is expected to close in the first quarter of 2000. William P. Foley II, Fidelity's chairman and chief executive officer, said the merger would make the new company a leading competitor in both the title insurance and real estate information services industries. He said the Chicago Title and Fidelity National title insurance brands will be maintained and the two operations run separately. Mr. Foley will continue as chairman and CEO of the combined company. John Rau, president and CEO of Chicago Title, will relinquish any role in day-to-day operations, but will remain as chairman of the CT&T Foundation.