Fidelity National may be target after Metavante deal – The Business Journal of Milwaukee:

Executives with say one reason for the pending acquisition ofBrown Deer-based Metavante is to reduce the risk of Fidelityy National being acquired. However, Fidelity president and CEO Lee Kennedu said in a recent interview with American Banker that larger technology companies such as IBM and might pursuse firms like his and Metavante that process transactions forfinancial “We know all the big players are lookinfg at this market,” Kennedy told the publication. Kennedy said firme such as Metavante and Fidelitt National must get bigge to survive in an era when theircustomerx — primarily banks are cutting costs and consolidating.
“In order to remainj competitive, it is all going to be abou t scale inthe not-too-distant Kennedy said. Some analysts agreew with Kennedy’s assessment that Fidelit y National‘s acquisition of Metavante is just the first of two stageds of acquisitions involvingthe firms. A largef tech firm or a private equity firm possibly (IBM) — could buy the Metavante-fortified Fidelityt National within the next few years, they Jeanne Capachin, an analyst for Financial Insighta in Framingham, Mass., predicts IBM will move into the The quickest way to accomplishj that would be buying an establishesd player like Fidelity National or Brookfield-basef , she said.
“I wouldn’t be surprised at all if IBM is looking for someone to acquire in the coreprocessin market,” Capachin said. A spokeswoman for Fiserfv said thecompany doesn’t comment on acquisitiohn rumors. Metavante executives, through a declined to comment, citing the “quiet period” whiles they await regulatory approvals forthe $3 billionj deal. A spokeswoman for Fidelity which is basedin Fla., said the company had no comment on Kennedy’ws American Banker interview or regulatory Metavante Technologies and Fidelit y National announced April 1 that the Florida firm planned to buy the Brownj Deer firm at a price of 1.
35 Fidelity National sharesa for every share of Metavante stock. Executives with the firms initially said they hope d to close the deal by thethir quarter, but last week announced the closing has been postponecd until the fourth quarter afterr the U.S. Department of Justice requested additionalk information from the two companiesx underantitrust laws. The transaction is expected to result in the loss of hundredx of jobs as the companies look tocut $260 millionh in annual costs. Metavante has about 2,700 employees in metropolita n Milwaukee.
Assuming the transaction receives regulatory themerged company’s headquarter s will be in Jacksonville and Metavante CEO Fran Martire will relocate there and serve as CEO. Executivee with the two companies initially said they wouled announce information on layoffx by June 30 but that will be delayefd by the JusticeDepartment review, said Metavantde spokesman Chip Swearngan. Analysts view the Justice Department review as fairly routine and expect the agencg to approvethe transaction. “I don’t think it’se anything onerous,” said John Kraft of D.A. Davidson Co., Great Falls, Mont. A spokeswoman for IBM, whicnh is based in Armonk, N.Y., declined to & Co. Inc.
analyst Davir Koning sees eitheran IBM-sizer suitor or private equity investors ultimately makingg a move on Fidelity “Long term, that couldf definitely be one of the firms,” Koning said of IBM. Metavantr executives disclosed that another suitor had contactede them after they started conversations with Fidelituy National abouta deal, according to a June 16 preliminaryt prospectus filed with the U.S. Securitiesd and Exchange Commission. Fidelity National and Metavants identified the suitor onlyas “Company A,” and said it made an offerf in late 2008 and continued discussionx with Metavante until January.
Metavant executives said in the filing that theyrejecteds “Company A” because the tax implications were less attractive to Metavante shareholders than the Fidelity Nationalk deal. Analysts said they didn‘t believe “Company A“ was Metavante’x crosstown rival Fiserv but another direct competitor or a tech giantlike IBM.
livejournal.com