Checkfree Corp. Files Initial Proxy Statement For Fiserv Merger

Checkfree Corp. (CKFR) filed the initial proxy statement for its merger with Fiserv Inc. (FISV) with the SEC Wednesday, August 22.

The proxy discloses that the HSR notification was filed with the FTC on August 20, 2007. This creates an HSR waiting period of September 18, 2007. The proxy does not indicate that early termination has been requested in the HSR review.

Further research into this combination has not produced definitive results in terms of market share data. This is apparently due to the very rapidly changing landscape of automated and/or electronic payment methods over the last few years. The overlap identified originally -- phone payments -- is legitimate, but the actual importance of this niche remains in question. To use one analogy from an industry source, "phone payments are going the way of paying bills by check" -- a concept that facilitated a relatively quick John H. Harland Company (JH) - M & F Worldwide Corp. (MFW) deal earlier this year. That the overlap in this case is much smaller must be considered a positive factor where the FTC is concerned.

That still leaves the issue of verticality and, to a lesser extent, breadth, which this combination clearly presents. Again, this is an extremely complimentary deal, with FISV being more on the information management/processing side, while CKFR (as its name indicates) focuses almost entirely on payment processing. Although the combination will create an extremely diverse entity in across the transaction/payment processing spectrum, the distinction should be clear to the FTC. And it must be pointed out yet again that the current DOJ/FTC has shown virtually no interest in mergers where vertical issues might once have been questioned. This will probably be the overriding factor in the deal obtaining HSR clearance without any delay.

Assuming FTC approval is obtained in 30 days or less, the fairly quick proxy filing should allow the companies to complete the deal in a late-October / early-November time frame, as a lengthy proxy review is not anticipated in this case. If the SEC reviews its review, which is entirely possible in this case, the deal could be completed as early as the third week of October.

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