CHICAGO - Real estate services company Fidelity National FinancialInc. has agreed to buy larger rival Chicago Title Corp. for about$1.2 billion, or $52 a share, in about equal amounts of cash andstock.
The purchase, announced Sunday, more than doubles the size ofFidelity National Financial to about 1,000 offices throughout thecountry. The combined company will retain the name Fidelity NationalFinancial, but will be run separately, First National said in a newsrelease.
Based on 1998 combined revenue of about $3.2 billion, FidelityNational said the combined company will be the largest titleinsurance company in the United States.
The $52 a share offer represents a 42 percent premium over ChicagoTitle's closing price Thursday, the day before talks between the twocompanies were announced. The cash and stock balance will beadjusted so Chicago Title stockholders will receive more than 50percent of the outstanding stock of the new company, FidelityNational said.
The deal, is expected to be completed by the end of March, willhelp Fidelity National, the nation's No. 5 title insurance company,expand its commercial insurance business.
Chicago Title, the nation's No. 3 title insurer, is a holdingcompany for a group of insurance companies that provide titleinsurance, property valuation and other services for real estatetransactions involving financial institutions, insurers and companiesbuying commercial properties. The group writes about one-fifth ofall title insurance policies in the U.S.
"The addition of Chicago Title's operations, products and skillswill result in the creation of a preeminent competitor in the titleinsurance industry," William P. Foley II, Fidelity's chairman andchief executive officer, said in a news release.
Shares of Fidelity National closed Friday at $17.43 3/4, down 61/4 cents, on the New York Stock Exchange. Chicago Title's shareswere up 16.5 percent, or $6.06 1/4, at $42.75, also on the Big Board.
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