Fidelity National Says Spinoff Is Tax-Free
|October 10, 2006|
JACKSONVILLE, Fla. (AP) -- Fidelity National Financial Inc., which provides title and specialty insurance, transaction processing and outsourced products and services, on Monday said the Internal Revenue Service ruled that aspects of its plan to spin off and recombine portions of its business will be tax-free to the company and its shareholders.
Fidelity National Financial is the parent company Fidelity National Title Group and Fidelity National Information Services.
Under a deal announced in June, Fidelity National Financial is spinning off most of its assets to Fidelity National Title and merging Fidelity National Financial into Fidelity National Information Services. The title group will then be renamed Fidelity National Financial.
On Monday, the company said the IRS ruled that the distribution of Fidelity National Title stock to Fidelity National Financial shareholders, and the merger of Fidelity National Financial into Fidelity National Information Services, will be tax-free.
Fidelity National Financial shareholders will, however, recognize a gain or a loss on cash received for any fractional shares obtained in the distribution and subsequent merger, the company said.
The company said all three businesses' shareholders will meet on Oct. 23. Then, on Oct. 24, Fidelity National Financial shareholders of record as of Oct. 17 will receive all of the shares of Fidelity National Title common stock held by the company.
The merger of the financial and information services businesses is expected to close on Nov. 9.
Copyright 2006 Associated Press