Updated 10:10 a.m.:
LandAmerica, the struggling Glen-Allen-based title insurance company has agreed to sell itself to Fidelity National Financial in a stock deal valued at about $128.4 million.
The deal will need to be approved by regulators and shareholders, according to a statement issued by LandAmerica.
“Since the middle of last year, we have been operating in the midst of a severely depressed market with declining property values, little new construction and more recently, an acute credit freeze,” said LandAmerica CEO Theodore Chandler in a statement.
The possible sale could spell layoffs for most of the Richmond staff. On Monday the company cut 120 employees and was down to 700. You can read about that here, as well as learn the severance packages.
According to the AP, “The proposed combination would create a company that could control nearly half the title insurance market. The companies involved in the deal captured 46.3 percent of the title insurance market during 2007”
LandAmerica desperately needed cash. Fidelity National Financial’s title insurance subsidiaries will help supply that cash and help the company cover its debt.
Shares of LandAmerica are trading up 80% in early morning trading. Jacksonville, Florida-based Fidelity National lost $198.3 million in the third quarter. It also cut 1,000 jobs, according to Reuters.
Reuters is also reporting that LandAmerica’s CEO Ted Chandler will join Fidelity’s board of directors as vice chairman if the deal goes through.
BizSense has obtained a letter CEO Ted Chandler sent to employees this morning:
|
Since the middle of last year, we have been operating in the midst of a severely depressed market with declining property values, little new construction and more recently, an acute credit freeze. The confluence of these events has combined to negatively impact our financial strength. We are in a market unlike any other ever experienced. Market conditions have affected our business in such a way that it is best for us to join forces with another company. Our board of directors has chosen to accept an offer from an industry player with great financial strength, Fidelity National Financial, who will add LandAmerica to its family of companies. Fidelity is a leading provider of title insurance, specialty insurance, claims management services and information services as well as one of the nation’s largest title insurance companies through its title insurance underwriters – Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title – that issue approximately 27 percent of all title insurance policies in the United States. The boards of both companies have approved this combination and we will seek shareholder, regulatory and other approvals in the upcoming weeks. We are fortunate to have the opportunity to join with Fidelity to create a global operation that will be the strongest and most financially sound company in our space. Pairing our customer service reputation and solid market presence with the financial strength of Fidelity’s current family of companies ensures greater success and opportunities for us in these volatile and uncertain times. We have taken great pride in building a principled organization dedicated to superior service delivered by talented specialists. As we’ve worked through the years to become the premier provider of real estate transaction services, we transformed ourselves from a single product orientation to a company that offers a comprehensive set of services around the real estate transaction. We’ve accomplished quite a lot together as an independent company. A transaction of this size generally takes many months to close. Remember, too, that we have a responsibility to our customers and employees to be as effective and efficient as we can be in this environment. Accordingly, the Executive Leadership Team continues to analyze and act on cost reductions appropriate for current market conditions on a real time basis. As we move forward with Fidelity to face the challenges of this difficult market, we are in a better position to strengthen our business and prosper together. We need you on board to win in the marketplace. Thank you for your continued commitment to our success.
Ted |
| Theodore L. Chandler, Jr. Chairman and CEO LandAmerica |
Updated 10:10 a.m.:
LandAmerica, the struggling Glen-Allen-based title insurance company has agreed to sell itself to Fidelity National Financial in a stock deal valued at about $128.4 million.
The deal will need to be approved by regulators and shareholders, according to a statement issued by LandAmerica.
“Since the middle of last year, we have been operating in the midst of a severely depressed market with declining property values, little new construction and more recently, an acute credit freeze,” said LandAmerica CEO Theodore Chandler in a statement.
The possible sale could spell layoffs for most of the Richmond staff. On Monday the company cut 120 employees and was down to 700. You can read about that here, as well as learn the severance packages.
According to the AP, “The proposed combination would create a company that could control nearly half the title insurance market. The companies involved in the deal captured 46.3 percent of the title insurance market during 2007”
LandAmerica desperately needed cash. Fidelity National Financial’s title insurance subsidiaries will help supply that cash and help the company cover its debt.
Shares of LandAmerica are trading up 80% in early morning trading. Jacksonville, Florida-based Fidelity National lost $198.3 million in the third quarter. It also cut 1,000 jobs, according to Reuters.
Reuters is also reporting that LandAmerica’s CEO Ted Chandler will join Fidelity’s board of directors as vice chairman if the deal goes through.
BizSense has obtained a letter CEO Ted Chandler sent to employees this morning:
|
Since the middle of last year, we have been operating in the midst of a severely depressed market with declining property values, little new construction and more recently, an acute credit freeze. The confluence of these events has combined to negatively impact our financial strength. We are in a market unlike any other ever experienced. Market conditions have affected our business in such a way that it is best for us to join forces with another company. Our board of directors has chosen to accept an offer from an industry player with great financial strength, Fidelity National Financial, who will add LandAmerica to its family of companies. Fidelity is a leading provider of title insurance, specialty insurance, claims management services and information services as well as one of the nation’s largest title insurance companies through its title insurance underwriters – Fidelity National Title, Chicago Title, Ticor Title, Security Union Title and Alamo Title – that issue approximately 27 percent of all title insurance policies in the United States. The boards of both companies have approved this combination and we will seek shareholder, regulatory and other approvals in the upcoming weeks. We are fortunate to have the opportunity to join with Fidelity to create a global operation that will be the strongest and most financially sound company in our space. Pairing our customer service reputation and solid market presence with the financial strength of Fidelity’s current family of companies ensures greater success and opportunities for us in these volatile and uncertain times. We have taken great pride in building a principled organization dedicated to superior service delivered by talented specialists. As we’ve worked through the years to become the premier provider of real estate transaction services, we transformed ourselves from a single product orientation to a company that offers a comprehensive set of services around the real estate transaction. We’ve accomplished quite a lot together as an independent company. A transaction of this size generally takes many months to close. Remember, too, that we have a responsibility to our customers and employees to be as effective and efficient as we can be in this environment. Accordingly, the Executive Leadership Team continues to analyze and act on cost reductions appropriate for current market conditions on a real time basis. As we move forward with Fidelity to face the challenges of this difficult market, we are in a better position to strengthen our business and prosper together. We need you on board to win in the marketplace. Thank you for your continued commitment to our success.
Ted |
| Theodore L. Chandler, Jr. Chairman and CEO LandAmerica |