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Fidelity National Financial acquires Cayman’s FGL Holdings

United States-based Fidelity National Financial Inc (FNF) has entered into a merger agreement with FGL Holdings (F&G), which it will purchase for US$12.50 per share or approximately US$2.7 billion.

According to Chris Blunt, president and CEO of FGL Holdings, “We are pleased to join forces with FNF, a world-class company we know well and respect.”

(Photo: PR Newswire)

He continued: “This agreement, which offers immediate value to F&G shareholders and compelling benefits to our stakeholders, will provide a meaningful platform for our business as we continue to build the F&G of the future. We are excited to enter into the next phase of growth with FNF and are confident that by combining our complementary businesses, we will be better positioned to carry out our mission of helping customers turn their aspirations into reality.”

Terms of agreement

At present, FNF owns 7.9 per cent of F&G’s outstanding ordinary shares and all of F&G’s Series B Preferred shares. Consequent to the closure of the acquisition, the US-based conglomerate will acquire all outstanding F&G Series A preferred shares approximating to US$321 million as of December 31, 2019.

Chris Blunt, president and CEO of FGL Holdings
(Photo: FGL Holdings)

With the acquisition, FNF will also assume F&G’s US$550-million senior notes due 2025. As a result, the American company’s FNF’s debt to total capital will reach approximately 26 per cent at the close of the transaction.

Under the terms of the agreement, F&G shareholders may choose the US$12.50 per share cash offer or approximately 26 per cent value of FNF common stock.

“We have tremendous respect for Bill Foley and FNF and are excited about this next chapter for F&G as the company will have substantial opportunities to leverage FNF’s scale and platform to accelerate value creation for shareholders.”

— Chinh E Chu, co-chairman of F&G

The latter option provides shareholders with a prorated 60:40 cash and common stock compensation package, and with a full take-up of the offer, F&G shareholders would won a 7.0 per cent stake in FNF.

Approvals and closure

Despite the agreement receiving approval from a special committee of F&G directors, a special committee of FNF Directors and the FNF board of directors, shareholders will have to vote on the terms of the merger, shareholders will have to vote on the options available. In addition, the transaction is subject to the satisfaction of closing conditions, including the receipt of regulatory clearances.

Bill Foley, chairman of Fidelity National Financial Inc. (Photo: Jacksonville Daily Journal)

“We have tremendous respect for Bill Foley and FNF and are excited about this next chapter for F&G as the company will have substantial opportunities to leverage FNF’s scale and platform to accelerate value creation for shareholders,” he added.

With a 40-day “go-shop” clause in the agreement, ending on Wednesday, March 18, 2020, the transaction should close in the first part of the second quarter.