Lender Processing Surges on Report of Sale Talks

Lender Processing Services Inc. climbed the most in almost four years after a report that it’s in talks to sell itself for about $2.9 billion. Fidelity National Financial Inc., a would-be buyer, also surged.

LPS, a provider of mortgage-processing services to lenders, is in advanced negotiations to be sold to U.S. title insurer Fidelity National and private-equity firm Thomas H. Lee Partners, a person with direct knowledge of the matter said, confirming a Wall Street Journal report from yesterday.

LPS jumped as much as 15 percent in New York, the most since July 2009. The Jacksonville, Florida-based company rose 13 percent to $32.88 at the close and has gained 46 percent in the past year. The transaction would value LPS at about $33 a share, the person said, requesting anonymity because the talks aren’t public.

“While the deal has not yet been announced, we believe that it would make sense and that the details from media report also appear quite feasible,” Mark Palmer, an analyst at BTIG LLC, wrote in a research note.

Fidelity National advanced 5.7 percent to $25.75 in New York. The firm, also based in Jacksonville, rose as much as 9.4 percent, the biggest intraday gain since April 2009. It has climbed 9.3 percent this year.

Fidelity National formerly owned LPS, which was spun off in 2008. Spokesmen for LPS and Thomas H. Lee Partners didn’t return messages seeking comment. Daniel Kennedy Murphy, Fidelity National’s senior vice president and treasurer, declined to comment.

LPS would operate as a subsidiary of Fidelity National, which would take about an 80 percent stake in the business, according to the person. Boston-based Thomas H. Lee would hold about 20 percent of the company, the person said. LPS says its technology is used by lenders to handle about 50 percent of all U.S. mortgages by dollar value.

Before it's here, it's on the Bloomberg Terminal.