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Fidelity National Financial, Inc. Message Board

  • rudfox rudfox Jan 3, 2014 3:44 PM Flag

    FNF Buyout of LPS Lender Processing Services

    Is the LPS takeover treated as a sale, or is there some other treatment?

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    • On the FNF site in the Investor FAQs there is now a link to a PDF
      "Tax basis Information for former LPS stockholders". It says, if I read correctly, that the new FNF shares will have a basis equal to $32.25 -- the closing price on Jan 2 -- or a similar value if a slightly different valuation is selected. The basis of the LPS shares will not affect the FNF shares received. Instead that basis will be the basis of a SELL of the LPS shares. The proceeds of the LPS shares will be the cash received ($28.102 per each LPS share) plus ($32.25 *0.28742)for each LPS share.

      See how you interpret it.

    • I would assume LPS shraeholders take gains on the cash portion. On the stock portion they carry their basis forward. The circular should have an entire section on tax treatment.

      • 1 Reply to dontbetheball
      • Thanks. While I cannot find it now, some such document I read had made me think this is total purchase accounting, as opposed to the common kind which is at least partially a non-taxable event. In those you usually have a document that the takeover company has asked for an IRS private letter to that effect.

        I will be staying tuned. If I remember correctly, FNF in the past has not been a leader in explaining the tax effects simply to the small investor. On the other hand, they have been pretty good at generating value.

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