Posted by loma on 11/26/08 8:57am
Msg #270631
LandAmerica Files Bankruptcy read in trade magazine
Headline Read~
LandAmerica Financial Group filed for Chapter 11 bankruptcy opening the door for Fidelity National Financial to acquire its underwriters, Commonwealth, Lawyers and United, for $298 million.
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Reply by NCLisa on 11/26/08 8:31pm
Msg #270685
Re: UPDATE: LandAmerica Files Bankruptcy read in trade magazine
I do understand the difference, but it still means that Fidelity owns them all! When Fidelity bought out Chicago & Ticor, they let Chicago Title keep running itself like it always did. There would be a Fidelity TC on one corner, a Chicago TC across the street, down the block would be a Commonwealth office, and a PTC and Fatco, etc.
I would like to know if they will let the TC's keep running as they were, or consolidate them into Chicago & Fidelity. It seems like a lot of competing against themselves for marketshare otherwise, in a time when there is almost no marketshare.
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Reply by Notary/Guy on 11/28/08 12:42am
Msg #270710
Fidelity, LandAmerica deal back on
Fidelity, LandAmerica back on New deal lets FNF buy the operations without taking on its debt.Five days after canceling its agreement to buy financially troubled LandAmerica Financial Group, Fidelity National Financial Inc. worked out a new deal to buy LandAmerica's title insurance business anyway.Jacksonville-based Fidelity announced in the early morning hours Wednesday that it agreed to buy LandAmerica's title insurance operations, as Richmond, Va.-based Land-America filed for Chapter 11 bankruptcy protection. The new deal basically allows Fidelity to buy the title insurance operations it wanted but without having to take on Land- America's debts.
The acquisition significantly increases Fidelity's position in the title insurance market. It issues about 27 percent of all title policies in the United States, but the addition of LandAmerica's businesses will give Fidelity about a 46 percent share of the market.
"It's an excellent transaction for FNF. It really is," Fidelity chairman Bill Foley said.
"Under the circumstances, it's probably the best outcome for LandAmerica," he said.
The title insurance industry has been hurt by the housing market downturn, which has reduced demand for new title orders. But LandAmerica has been hurt more than the other companies, recording a net loss of $674 million in the first nine months of the year.
Fidelity agreed to buy the company in a deal announced Nov. 7, but that agreement allowed Fidelity to examine LandAmerica's books for two weeks before making a final decision. Fidelity announced Friday night that it was backing out of the deal.
"We had gone back to them last Wednesday and Thursday and said we didn't feel like the transaction for the whole company was going to work for us," Foley said.
He said Fidelity officials told LandAmerica that it would consider buying only the title insurance subsidiaries, which would provide Land- America with cash. Although LandAmerica's main business is title insurance, it does have some other smaller subsidiaries that provide real estate-related servicesHe said Fidelity officials told LandAmerica that it would consider buying only the title insurance subsidiaries, which would provide Land- America with cash. Although LandAmerica's main business is title insurance, it does have some other smaller subsidiaries that provide real estate-related services.
Foley said LandAmerica CEO Theodore Chandler called him on Saturday morning and said he was interested in pursuing that deal.
Both companies announced the deal at about 2 a.m. Wednesday, after LandAmerica filed for a Chapter 11 reorganization in U.S. Bankruptcy Court in Virginia.
"We, in effect, have done a prepackaged agreement that we're submitting to the bankruptcy court," Foley said. The companies are hoping to get expedited approval for the deal from the court and to complete the sale by the end of this year.
The original merger deal called for Fidelity to issue stock to LandAmerica shareholders valued at $128 million, and also pay off LandAmerica debt. Foley said the value of that deal would have cost Fidelity about $800 millionThe new deal calls for Fidelity to pay $298 million in cash to LandAmerica and not take on any debt.
Chandler said in a news release he was "deeply disappointed" over the need to seek bankruptcy relief. "However, this sale of our principal domestic title operations to Fidelity National in this coordinated Chapter 11 filing and Nebraska rehabilitation action offers our stakeholders the best result available in this brutal real estate, credit and capital market environment," he said.
The Nebraska Department of Insurance, which regulates LandAmerica's two main title insurance subsidiaries, filed petitions for rehabilitation for the two companies on Monday. LandAmerica said that will help the transition of the businesses from LandAmerica's to Fidelity's ownership. Fidelity said it expects to immediately begin meeting with workers for those subsidiaries to ensure a smooth transition.
Foley said Wednesday, as he had after the Nov. 7 announcement, that the acquisition could mean more jobs for Fidelity's Jacksonville operations. The company employs about 500 people at its Riverside Avenue headquarters. Two other companies spun off from Fidelity employ about 2,500 people in Jacksonville.
Investors also saw the deal as positive for Fidelity, sending the stock up $2.19 to $12.38 on Wednesday.
LandAmerica's stock fell $3.83 to 51 cents on Monday, with many investors assuming the company would be forced into bankruptcy after Fidelity called off the original merger agreement. The stock was listed at 20 cents on Wednesday.
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