(FIDELITY NATIONAL FINANCIAL LOGO)
PRESS RELEASE
(FNIS LOGO)
Filed by Fidelity National Financial, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant
to Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Fidelity National Information Solutions, Inc.
Commission File No.: 000-20312
Date: July 11, 2003
FIDELITY NATIONAL FINANCIAL AND FNIS ANNOUNCE TERMS OF MERGER AGREEMENT
JACKSONVILLE, Fla. and SANTA BARBARA, Calif. -- (July 11, 2003) --
Fidelity National Financial, Inc. (NYSE: FNF), a Fortune 500 provider of
products, services and solutions to the real estate and financial services
industries and Fidelity National Information Solutions, Inc. (NASDAQ: FNIS)
today announced terms of the merger agreement whereby FNF will acquire all of
the outstanding stock of FNIS that it does not currently own. FNF currently owns
approximately 66 percent of the outstanding stock of FNIS.
Under the terms of the merger agreement, each share of FNIS common stock
will be exchanged for a share exchange ratio of 0.830 shares of FNF common
stock. Based on the closing price of $31.54 for FNF's common stock on Thursday,
July 10, 2003, the implied per share consideration is $26.18 per share of FNIS
common stock. The merger agreement provides for a $29 cap on the implied per
share consideration for each share of FNIS common stock. Also, if the implied
per share consideration for each share of FNIS common stock falls below a floor
of $19, FNF has the right to adjust the share exchange ratio to maintain an
implied $19 per share consideration for each share of FNIS common stock. If FNF
does not exercise this right, FNIS has
the right to not proceed with the closing of the merger. The transaction is
expected to qualify as a tax-free reorganization under the internal revenue
code.
The merger agreement was approved by the Board of Directors of FNIS,
following the recommendation of a Special Committee of the FNIS Board of
Directors, and by the Board of Directors of FNF, following the recommendation of
a Special Committee of the FNF Board of Directors. Both the FNF and FNIS Special
Committees of the Board of Directors received fairness opinions from their
respective investment banking financial advisors.
The merger is subject to FNIS stockholder approval. FNF is the majority
stockholder of FNIS, owning approximately 66 percent of the outstanding stock of
FNIS, and FNF has agreed that it will vote in favor of the merger. FNF
stockholder approval is required to amend the FNF Restated Certificate of
Incorporation to increase the authorized shares of common stock from 150,000,000
to 250,000,000 to allow for the issuance of new shares of FNF common stock to
holders of FNIS common stock in the merger.
Because the merger of FNIS and FNF will require the exchange of
outstanding stock options between entities under common control, the combined
companies will be required to record a compensation expense equal to the
difference between the aggregate exercise prices and intrinsic value of vested
FNIS stock options on the date the merger closes.
To reduce the stock options outstanding at the date of merger, certain
affiliated parties of FNIS are expected to volunteer to exercise 50 percent of
their FNIS stock options at their original strike prices and then sell the
underlying FNIS shares to unaffiliated third parties pursuant to Rule 144 or in
private placements. FNIS and FNF have agreed in the merger agreement to use
their efforts to bring about the option exercises and sales. As a result of
these stock option exercises, those FNIS affiliated parties will forfeit any
future increase in value in those stock options related
to the potential appreciation of FNF's common stock, while incurring current
income tax expense that otherwise would have been deferred.
The merger is also subject to the receipt of any required governmental and
regulatory approvals. The companies expect the merger to close late in the third
quarter or early in the fourth quarter of 2003.
Fidelity National Financial, Inc., number 326 on the Fortune 500, is a
provider of products, services and solutions to the real estate and financial
services industries. The Company had total revenue of $5.1 billion and earned
more than $530 million in 2002, with cash flow from operations of nearly $815
million. FNF is the nation's largest title insurance company and also performs
other real estate-related services such as escrow, default management, mortgage
loan fulfillment, exchange intermediary services and homeowners, flood and home
warranty insurance. FNF is also one of the world's largest providers of
information-based technology solutions and processing services to the mortgage
and financial services industries through its subsidiary Fidelity Information
Services, which has clients in more than 50 countries. It processes nearly 50
percent of all U. S. residential mortgages, with balances exceeding $2 trillion
and has processing and technology relationships with 48 of the top 50 U. S.
banks who rely on Fidelity Information Services' processing and outsourcing
products and services. More than 34 percent of the total dollar volume of all
outstanding consumer loans in the country, including mortgages, is processed on
Fidelity Information Services software applications. Fidelity National
Information Solutions (NASDAQ: FNIS), a majority-owned, publicly traded
subsidiary of FNF, provides data and valuations, technology solutions and
services for the real estate and mortgage industries. More information about the
FNF family of companies can be found at www.fnf.com,
www.fidelityinfoservices.com, and www.fnis.com.
FNF plans to file a registration statement on SEC Form S-4 that would
include its prospectus and FNIS' proxy statement to be sent to the FNIS
stockholders. FNF also plans to file a proxy statement to be sent to the FNF
stockholders. Both of these documents will contain important information about
the proposed transaction. Investors and stockholders are advised to read both
the registration statement on SEC Form S-4, including the proxy
statement/prospectus and FNF's proxy statement, regarding the potential
transaction when they become available. After the registration statement and
proxy statements are filed with the SEC, they will be available free of charge
on the SEC website at www.sec.gov. Stockholders will receive information at an
appropriate time on how to obtain transaction-related documents free of charge
from FNF and FNIS.
FNF and FNIS and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies or consents from
stockholders in connection with the proposed transaction. Information about the
directors and executive officers of FNF and FNIS and their respective ownership
of FNF and/or FNIS stock and information about other persons who may also be
deemed to be participants in FNF's and FNIS' solicitation will be included in
the registration statement and proxy statement.
This press release contains statements related to future events and
expectations and, as such, constitutes forward-looking statements. These
forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause actual results, performance or achievements of
the Company to be different from those expressed or implied above. The Company
expressly disclaims any duty to update or revise forward-looking statements. The
risks and uncertainties which forward-looking statements are subject to include,
but are not limited to, the failure of the parties to negotiate a definitive
agreement and the failure of the conditions to closing thereafter, the effect of
governmental regulations, the economy, competition and other
risks detailed from time to time in the "Management's Discussion and Analysis"
section of the Company's Form 10-K and other reports and filings with the
Securities and Exchange Commission.
SOURCES: Fidelity National Financial, Inc. and Fidelity National Information
Solutions, Inc. CONTACTS: FNF - Daniel Kennedy Murphy, Senior Vice President,
Finance and Investor Relations, 805-696-7218, dkmurphy@fnf.com; FNIS - Neil A.
Johnson, Executive Vice President and Chief Financial Officer, 805-696-7351,
njohnson@fnis.com