Corvex Urges Fidelity National Financial To Jettison Restaurants

Some things go great together. Peanut butter and jelly. Ernie and Bert. Song and Dance. Others go less well together. Title insurance and restaurants. Over at the Inelegant Investor, we shared our surprise at this bewildering combination back in August 2012.  Now, this strategy has generally worked well for Fidelity National Financial(FNF), but it seems that Corvex shares our belief that this is a pairing that does not make a lot of sense. Corvex recently filed a 13D revealing a 7% stake in the company, though it should be noted that much of this positions is comprised of options.

Though it was lacking in specifics, the filing urged the company to focus on its real estate business.

The Reporting Persons acquired the Shares over which they exercise beneficial ownership in the belief that the Shares are undervalued and are an attractive investment.  The Reporting Persons are supportive of the Issuer’s announced acquisition of Lender Processing Services and the associated equity offering, transitioning the Issuer into a leading real estate services and technology company.  Certain of the Reporting Persons have had and may continue to have discussions with the Issuer’s management and the board of directors of the Issuer (the “Board”) to discuss the Issuer’s business and strategies.  The Reporting Persons are pleased with their conversations to date with the Board and management and may seek to have additional conversations with the management, Board, stockholders of the Issuer and other persons to discuss the Issuer’s business, strategies and other matters related to the Issuer. These discussions have reviewed, and may continue to review, options for enhancing shareholder value through various strategic alternatives including, but not limited to, monetizing and highlighting the value of non-core assets, focusing capital allocation on core real estate services, return of capital to shareholders, enhancing disclosure and investor communications, and general corporate matters.
We believe that Corvex’s goal is for the company to divest its restaurant assets and that a spinoff is a likely means of doing so.
Disclosure: The author holds no position in any stock mentioned