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Fidelity National Information Services (NYSE:FIS) is said to be making plans for a tax-free spin-off of its merchant business, offloading much of the business from its $43 billion Worldpay acquisition in 2019.
The spin-off is expected to take several months to complete and Fidelity National (FIS) will also consider takeover offers it may get for the unit, according to a Reuters report late Friday, which cited people familiar. The spinoff may be announced as early as next week when FIS reports its Q4 results on Wednesday.
The Reuters story comes after recent media sources, including Dealreporter, discussed a potential spin off of the company's merchant payments unit and a possible sale of its capital markets business.
Fidelity National (FIS) is in the midst of a strategic review, which the company may update Wall Street on when it reports its Q4 results. Bloomberg earlier this month reported that FIS is said to have laid off 2.6K employees, or ~2% of its total headcount, in recent weeks as part of its strategic review.
On Friday, a Susquehanna analyst, discussing the recent spinoff speculation, wrote that Fidelity National (FIS) may be worth $95-$120 based on the sum-of-the-parts analysis. Fidelity National rose 2% in regular trading on Friday and an additional 1.4% in the after hours.
Last month, there was speculation that Fidelity National (FIS) received interest from a strategic buyer looking to acquire all or some of the payments company, according to a Betaville "uncooked" alert.
A Baird analyst said last month that Fidelity National (FIS) may be worth $85 to $105 a share in a potential takeover. Possible technology firms that could be interested include IBM (IBM), Accenture (ACN) and Oracle (ORCL).
The payment technology company in December announced it started a comprehensive review of its strategy, businesses, operations, and structure as part of a cooperation agreement with shareholder D.E. Shaw group.