Another case of worried suitors
LandAmerica’s experience is the latest example of how dismal the M&A market has become in financial services as potential suitors worry about buying someone else’s troubles.
The title insurer, weakened by the U.S. housing slump, started its search for a buyer some two months ago.
But despite hiring JPMorgan and Wachtell Lipton, setting up a data room and approaching a range of potential suitors – a large shareholder, rivals and private equity firms – it could not survive.
The unidentified shareholder, whom the company initially approached for a capital injection or acquisition, was uncomfortable with its potential liquidity needs.
Fidelity reached a new deal to buy the insurer’s largest underwriting businesses, while LandAmerica filed for Chapter 11 bankruptcy protection.
Fidelity agreed to pay a combined $298 million for the units. It had agreed to buy all of the company for about $126 million in stock earlier this month.
(Photo credit: Robert Galbraith, Reuters)