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Fifth Third Bancorp Announces Agreement to Sell Vantiv Shares

CINCINNATI--(BUSINESS WIRE)--On August 7, 2017, Fifth Third Bancorp and Fifth Third Bank entered into a transaction agreement with Vantiv, Inc. and Vantiv Holding, LLC (the “Repurchase Agreement”) pursuant to which (i) Fifth Third Bank has agreed to exercise its right to exchange 19.79 million of its Class B Units in Vantiv Holding, LLC for 19.79 million shares of Vantiv, Inc.’s Class A common stock and (ii) Vantiv, Inc. has agreed to repurchase the newly issued shares of Class A common stock upon issue (the “Share Repurchase”) directly from Fifth Third Bank at a price of $64.04 per share, the closing share price of the Class A common stock on the New York Stock Exchange on August 4, 2017. The Share Repurchase is conditioned on Vantiv, Inc. publishing a firm offer to acquire Worldpay Group plc. and is subject to termination, if among other things, the firm offer is not made by August 31, 2017.

During the third quarter, Fifth Third expects to recognize a pre-tax gain of approximately $1.0 billion (approximately $650 million after-tax) related to these transactions. Following the Share Repurchase, Fifth Third is expected to beneficially own approximately 8.6% of Vantiv’s equity through its ownership of approximately 15.25 million Class B units of Vantiv Holding, LLC. Following the closing of the Worldpay acquisition (if it occurs), Fifth Third is expected to beneficially own approximately 4.9% of Vantiv’s equity. Consistent with Fifth Third’s 2017 CCAR capital plan, Fifth Third currently expects to repurchase common shares from the realized after-tax gains from the transaction.

On consummation of the Share Repurchase, Fifth Third will no longer be entitled to appoint a director to Vantiv’s board of directors, and consequently Fifth Third’s remaining director will resign from Vantiv’s board.

Fifth Third will continue to account for its ownership in Vantiv Holding, LLC under the equity method of accounting given the nature of Vantiv Holding, LLC’s structure as a limited liability company and contractual arrangements between Vantiv Holding, LLC and Fifth Third. Subsequent to these transactions, Fifth Third’s equity method earnings in Vantiv Holding, LLC will decline approximately in proportion to the decline in Fifth Third’s ownership of Vantiv Holding, LLC. Assuming the after-tax proceeds are deployed into share repurchases, the impacts of these transactions are expected to be accretive to 2018 earnings per share.

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of June 30, 2017, the Company had $141 billion in assets and operates 1,157 full-service Banking Centers, and 2,461 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina. In total, Fifth Third provides its customers with...