FNF Eyes Major Restructuring

Fidelity National Financial Inc., Jacksonville, Fla., has sent a proposal to two majority-owned firms -- Fidelity National Information Services Inc. and Fidelity National Title Inc. -- that would result in the creation of two independent public companies.Under the proposal, FNF would totally divest itself of FNIS through a series of transactions. These include the sale of Sedgwich CMS Inc. to FNT in exchange for stock in FNT; the spinoff of FNF's ownership position in FNT to FNF shareholders, leaving FNF's ownership stake in FNIS as its only asset; merging FNF and FNIS, with FNIS as the surviving entity; and finally, renaming FNT as FNF and trading under that ticker symbol. "While we were hopeful that the holding company structure, with FNF having ownership stakes in public and private operating subsidiaries, would allow for a simpler valuation of the pieces of FNF, that simply has not proven to be the case, as the market has meaningfully discounted the value of FNF in relation to the sum of its parts," said William P. Foley, chairman and chief executive of FNF and chairman of FNIS and FNT. Mr. Foley said FNF's majority stake in the other two companies "limits the public float for each company, which may be significantly shrinking the universe of eligible shareholders" for FNT and FNIS and "limiting the trading liquidity, and thus the valuation" of the companies' stock.