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National Fidelity Information Services (New York Stock Exchange: FISIt is said to be making plans for a tax-free spinoff of its merchant business, offloading much of the business from its $43 billion acquisition of Worldpay in 2019.
The spinoff is is expected to take several months to complete and Fidelity National (FIS) will also consider any acquisition offers it may receive for the unit, based on a Reuters report on Friday night, which quoted well-known people. The spin-off may be announced next week when FIS reports its fourth quarter results On Wednesday.
The Reuters story comes after recent media sources, including Dealreporter, discussed a possible spin-off of the company’s merchant payments unit and a potential sale of its capital markets business.
Fidelity National (FIS) is in the midst of a strategic review, which the company can update Wall Street on when it reports its fourth-quarter results. Bloomberg earlier this month reported that FIS is said to have laid off 2,600 employees, or ~2% of its total headcount, in recent weeks as part of its strategic review.
On Friday, a Susquehanna analyst, discussing the recent spin-off speculation, wrote that Fidelity National (FIS) may be worth $95-$120 based on sum-of-the-parts analysis. National Fidelity increased 2% in regular trading on Friday and an additional 1.4% in after hours.
There was speculation last month that Fidelity National (FIS) received interest from a strategic buyer looking to acquire all or part of the payments company, according to an “uncooked” alert from Betaville.
A Baird analyst said last month that Fidelity National (FIS) could be worth $85 to $105 a share in a possible acquisition. Potential technology firms that might be interested include IBM (IBM), Accenture (ACN) and Oracle (ORCL).
The payments technology company announced in December that it had begun a comprehensive review of its strategy, business, operations and structure as part of a cooperative agreement with shareholder DE Shaw.
