Lender Processing Services Spikes on Plans to Rejoin with Fidelity National Financial

Michael Teague |

ForeclosureLender Processing Services (LPS), a provider of mortgage and consumer loan processing, was among the top three best-performing stocks in the services sector on Thursday on news that the company had reached the advanced stages of talks about a buyout deal with Fidelity National Financial Inc. (FNF) and the acquisitions firm Thomas H. Lee Partners.

Shares for LPS advanced over 12 percent to a 52-week high of $33.40. The $2.5 billion market cap company’s stock has gained 18.75 percent so far in 2013.

The proposed $2.9 billion deal breaks down to about $33 per share that would be paid to LPS shareholders partly with cash and partly with Fidelity National’s stock. Additionally, Thomas H. Lee would retain a 19.9 percent stake in Lender Processing as it becomes a subsidiary of Fidelity.

Lender Processing was spun off from Fidelity National Information Services only five years ago in June of 2008. In 2011, the company found itself mired in the foreclosure scandal known as “foreclosuregate,” during which the practice of “robo-signing,” the high-speed signing and approval of legal documents relating to home foreclosures by employees who had little to no knowledge about the contents of those documents, was revealed.

Fidelity National claims the mantle of the U.S.’s largest title insurer. The deal could be finalized as early as next week. Lender Processing Services has been unable to regain the $44 per share price it enjoyed prior to the eruption of the scandal that engulfed a number of other financial institutions

Shares for Fidelity National Financial were up 6 percent to $25.84.

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Companies

Symbol Name Price Change % Volume
FNF FNF Group of Fidelity National Financial Inc. 31.79 -0.16 -0.50 1,644,356
HTBK Heritage Commerce Corp 12.72 0.27 2.17 381,805

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