Fidelity National shares jump on buyout talk
The stock soars after The Wall Street Journal says Blackstone is in talks to take the credit card processor private. A deal might be worth $11 billion.
For a couple of days, Wall Street has been abuzz that a big buyout -- a deal worth $10 billion or more -- was coming.
Today, names were put to the rumors: Blackstone (BX) would be the acquirer, The Wall Street Journal said, with Fidelity National Information Services (FIS) the target.
Fidelity National shares jumped 15.8% to $30.04 on the news, which would suggest a market capitalization of more than $11 billion. The stock's jump was abrupt in the extreme. At 11:55 a.m. ET, the shares were at $25.80, down 0.8%. The news broke in the next few minutes, and at noon, the shares were at $29.92.
But Blackstone investors were more skeptical. The company is organized as a master limited partnership. The partnership units were down 5.1% to $12.62.
Fidelity National, headquartered in Jacksonville, Fla., processes credit card transactions, services auto loans and provides back-office services to money-management firms. It has been around since the late 1960s but public only since 2001.
The company earned $101 million, or 42 cents a share, on revenue of $3.77 billion in 2009, down from $109.9 million, or 57 cents, on revenue of $3.43 billion in 2008.
The stock peaked at $31.58 in July 2007 and bottomed at $12.47 in October 2008. It was up 11% for the year as of Wednesday's close.
It also has about $3 billion in debt.
It is NOT Fidelity Investments, the mutual fund company based in Boston.
Blackstone went public at $38 in 2007 as the stock market was peaking and has been a disappointment for investors ever since. Its unit price collapsed in the stock market crash, bottoming at $3.87 on Feb. 26, 2009. It finished 2009 at $13.12.
The jump in Fidelity National shares also pushed shares of competitor Fiserv (FISV) up 7.3% to $54.66. Other competitors include Accenture (ACN) and Total System Services (TSS). Both stocks were little changed today.
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