Fidelity National Financial, Inc. (NYSE:FNFV) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
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Entry into a Material Definitive Agreement.
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Equity Commitment Letters
On May 24, 2017, Fidelity National Financial, Inc. (the Company),
entered into equity commitment letters (the Equity Commitment
Letters) with CF Corporation, a Cayman Islands exempted company
(CF Corporation), relating to the business combination (Business
Combination) contemplated by that certain agreement and plan of
merger (the Merger Agreement), dated May 24, 2017, among CF
Corporation, Fidelity Guaranty Life, a Delaware corporation
(FGL), and the other parties thereto, to which the Company has
committed, on the terms and subject to the conditions set forth
therein, at the closing under the Merger Agreement (the Closing),
to purchase, or cause the purchase of, equity of CF Corporation
(the terms of which are described more fully under Investment
Agreement below) for an aggregate cash purchase price equal to
(x) $235 million plus (y) up to an aggregate of $195 million to
offset any redemptions of CF Corporations ordinary shares made in
connection with CF Corporations shareholder vote to approve the
Business Combination (the FNF Commitment). The Companys
non-executive Chairman, William P. Foley, II, is also the
Co-Executive Chairman of CF Corporation.
entered into equity commitment letters (the Equity Commitment
Letters) with CF Corporation, a Cayman Islands exempted company
(CF Corporation), relating to the business combination (Business
Combination) contemplated by that certain agreement and plan of
merger (the Merger Agreement), dated May 24, 2017, among CF
Corporation, Fidelity Guaranty Life, a Delaware corporation
(FGL), and the other parties thereto, to which the Company has
committed, on the terms and subject to the conditions set forth
therein, at the closing under the Merger Agreement (the Closing),
to purchase, or cause the purchase of, equity of CF Corporation
(the terms of which are described more fully under Investment
Agreement below) for an aggregate cash purchase price equal to
(x) $235 million plus (y) up to an aggregate of $195 million to
offset any redemptions of CF Corporations ordinary shares made in
connection with CF Corporations shareholder vote to approve the
Business Combination (the FNF Commitment). The Companys
non-executive Chairman, William P. Foley, II, is also the
Co-Executive Chairman of CF Corporation.
The obligation of the Company to fund the FNF Commitment will
terminate automatically and immediately upon the earliest to
occur of (a) the Closing (upon funding), (b) the termination of
the Merger Agreement in accordance with its terms and (c) FGL or
any of its affiliates or representatives asserting any claim
against the Company in connection with the Merger Agreement or
any of the transactions contemplated by the Equity Commitment
Letter or the Merger Agreement, subject to certain exceptions.
terminate automatically and immediately upon the earliest to
occur of (a) the Closing (upon funding), (b) the termination of
the Merger Agreement in accordance with its terms and (c) FGL or
any of its affiliates or representatives asserting any claim
against the Company in connection with the Merger Agreement or
any of the transactions contemplated by the Equity Commitment
Letter or the Merger Agreement, subject to certain exceptions.
Forward Purchase Backstop Equity Commitment Letters
to equity commitment letters (the Forward Purchase Backstop
Equity Commitment Letters, and together with the Equity
Commitment Letters, the FNF Equity Commitment Letters) from the
Company and Blackstone Tactical Opportunities Fund II L.P. (BTO
Fund), dated as of May 24, 2017, (i) the Company has committed,
on the terms and subject to the conditions set forth therein, at
the Closing, to purchase, or cause the purchase of, equity of CF
Corporation for an aggregate cash purchase price equal to
two-thirds (2/3) of the aggregate amount, if any, not funded by
one or more purchasers under the forward purchase agreements
between CF Corporation, CF Capital Growth, LLC and the
counterparties thereto (the Forward Purchase Agreements) at or
prior to the Closing (the FPA Shortfall), up to an aggregate
amount of $200 million, and (ii) BTO Fund has committed, on the
terms and subject to the conditions set forth therein, at the
Closing, to purchase, or cause the purchase of, equity of CF
Corporation for an aggregate cash purchase price equal to
one-third (1/3) of the FPA Shortfall, up to an aggregate amount
of $100 million (together, the Forward Purchase Backstop
Commitments).
Equity Commitment Letters, and together with the Equity
Commitment Letters, the FNF Equity Commitment Letters) from the
Company and Blackstone Tactical Opportunities Fund II L.P. (BTO
Fund), dated as of May 24, 2017, (i) the Company has committed,
on the terms and subject to the conditions set forth therein, at
the Closing, to purchase, or cause the purchase of, equity of CF
Corporation for an aggregate cash purchase price equal to
two-thirds (2/3) of the aggregate amount, if any, not funded by
one or more purchasers under the forward purchase agreements
between CF Corporation, CF Capital Growth, LLC and the
counterparties thereto (the Forward Purchase Agreements) at or
prior to the Closing (the FPA Shortfall), up to an aggregate
amount of $200 million, and (ii) BTO Fund has committed, on the
terms and subject to the conditions set forth therein, at the
Closing, to purchase, or cause the purchase of, equity of CF
Corporation for an aggregate cash purchase price equal to
one-third (1/3) of the FPA Shortfall, up to an aggregate amount
of $100 million (together, the Forward Purchase Backstop
Commitments).
In exchange for providing the Forward Purchase Backstop
Commitments, promptly following the Closing, CF Corporation will
pay $3.0 million to the Company and $1.5 million to BTO Fund or
its designated affiliate, with such amounts payable whether or
not any portion of the Forward Purchase Backstop Commitment is
ultimately required to be funded.
Commitments, promptly following the Closing, CF Corporation will
pay $3.0 million to the Company and $1.5 million to BTO Fund or
its designated affiliate, with such amounts payable whether or
not any portion of the Forward Purchase Backstop Commitment is
ultimately required to be funded.
The obligation of the parties to the Forward Purchase Backstop
Equity Commitment Letters (the Forward Purchase Backstop Parties)
to fund the Forward Purchase Backstop Commitments will terminate
automatically and immediately upon the earliest to occur of (a)
the Closing (upon funding), (b) the termination of the Merger
Agreement in accordance with its terms and (c) FGL or any of its
affiliates or representatives asserting any claim against any
Forward Purchase Backstop Party in connection with the Merger
Agreement or any of the transactions contemplated by the Forward
Purchase Backstop Equity Commitment Letters or the Merger
Agreement, subject to certain exceptions.
Equity Commitment Letters (the Forward Purchase Backstop Parties)
to fund the Forward Purchase Backstop Commitments will terminate
automatically and immediately upon the earliest to occur of (a)
the Closing (upon funding), (b) the termination of the Merger
Agreement in accordance with its terms and (c) FGL or any of its
affiliates or representatives asserting any claim against any
Forward Purchase Backstop Party in connection with the Merger
Agreement or any of the transactions contemplated by the Forward
Purchase Backstop Equity Commitment Letters or the Merger
Agreement, subject to certain exceptions.
The FNF Equity Commitment Letters include an aggregate of $21
million in commitments that relate to the Share Purchase
Agreement described in Item 8.01 herein, including $7 million
which would be used to offset any redemptions of CF Corporations
ordinary shares made in connection with CF Corporations
shareholder vote to approve the Business Combination and $6
million which would be used to fund any FPA Shortfall.
million in commitments that relate to the Share Purchase
Agreement described in Item 8.01 herein, including $7 million
which would be used to offset any redemptions of CF Corporations
ordinary shares made in connection with CF Corporations
shareholder vote to approve the Business Combination and $6
million which would be used to fund any FPA Shortfall.
Limited Guaranty
In addition, the Company together with BTO Fund and GSO Capital
Partners LP (GSO), executed a limited guaranty in favor of FGL to
guarantee, in the event that the Merger Agreement is terminated
as a result of CF Corporations or its subsidiaries intentional
and material breach or fraud, the payment of a portion of any
damages determined in a final judgment by a court or governmental
authority or to a settlement by written agreement of the parties
to the Merger Agreement, up to a specified portion of the total
transaction value.
Partners LP (GSO), executed a limited guaranty in favor of FGL to
guarantee, in the event that the Merger Agreement is terminated
as a result of CF Corporations or its subsidiaries intentional
and material breach or fraud, the payment of a portion of any
damages determined in a final judgment by a court or governmental
authority or to a settlement by written agreement of the parties
to the Merger Agreement, up to a specified portion of the total
transaction value.
Investor Agreement
As an inducement for their agreement to enter into certain
limited guaranties (described above) in connection with the
Merger Agreement, each of the Company, BTO Fund and GSO
(collectively, the Investor Agreement Parties), entered into an
investor letter agreement with CF Corporation, dated May 24, 2017
(the Investor Agreement), to which CF Corporation agreed that,
without the Investor Agreement Parties prior written consent, it
would not amend, modify, grant any waiver of any condition under
or seek to terminate any of the transaction agreements relating
to the Business Combination, or take any action concerning
settlements, stipulations or judgments with or by government
authorities or make any regulatory filings contemplated by the
Merger Agreement, subject in each case to certain exceptions and
qualifications.
limited guaranties (described above) in connection with the
Merger Agreement, each of the Company, BTO Fund and GSO
(collectively, the Investor Agreement Parties), entered into an
investor letter agreement with CF Corporation, dated May 24, 2017
(the Investor Agreement), to which CF Corporation agreed that,
without the Investor Agreement Parties prior written consent, it
would not amend, modify, grant any waiver of any condition under
or seek to terminate any of the transaction agreements relating
to the Business Combination, or take any action concerning
settlements, stipulations or judgments with or by government
authorities or make any regulatory filings contemplated by the
Merger Agreement, subject in each case to certain exceptions and
qualifications.
to the Investor Agreement, the terms of the equity to be issued
to the Company to the FNF Equity Commitment Letters will be as
follows:
to the Company to the FNF Equity Commitment Letters will be as
follows:
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With respect to the FNF Commitment described in the Equity
Commitment Letters, the Company will purchase (i) $135 million of ordinary shares of CF Corporation for $10.00 per share, and (ii) $100 million of preferred shares, plus additional amounts, if any, to the Companys commitment to offset a portion of the redemptions of CF Corporations ordinary shares, if any, and warrants on the terms as set forth in the term sheet attached to that certain GSO Side Letter, dated May 24, 2017, between GSO and CF Corporation (the GSO Side Letter). |
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In the event that holders of CF Corporations ordinary
shares redeem their shares in connection with the shareholder vote to approve the Business Combination, a certain portion of the FNF Commitment, as described in the Equity Commitment Letters, shall be allocated pro rata>based on its aggregate commitment thereunder. |
The Investor Agreement further provides that the Investor
Agreement Parties will receive registration rights on customary
terms with respect to the ordinary shares, preferred shares,
warrants (and the ordinary shares underlying such warrants)
issued by CF Corporation to the FNF Equity Commitment Letters.
Agreement Parties will receive registration rights on customary
terms with respect to the ordinary shares, preferred shares,
warrants (and the ordinary shares underlying such warrants)
issued by CF Corporation to the FNF Equity Commitment Letters.
FNF Fee Letter
As consideration for the FNF Commitment (including the backstop
commitment) and the agreements of the Company under the Equity
Commitment Letters and limited guaranty, the Company also entered
into a fee letter agreement with CF Corporation, dated May 24,
2017 (the FNF Fee Letter), to which CF Corporation has agreed to
pay to the Company the following fees at the Closing:
commitment) and the agreements of the Company under the Equity
Commitment Letters and limited guaranty, the Company also entered
into a fee letter agreement with CF Corporation, dated May 24,
2017 (the FNF Fee Letter), to which CF Corporation has agreed to
pay to the Company the following fees at the Closing:
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the original issue discount of $2.0 million in respect of
the preferred shares (the OID); |
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a commitment fee of $2.925 million;
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penny warrants convertible, in the aggregate, for 1.2% of
CF Corporations ordinary shares (on a fully diluted basis) (the Investment Warrants); and |
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if, and to the extent, any amount of the preferred equity
under the Companys backstop commitment is funded (the Backstop Equity), (x) a funding fee of 0.5% of the amount of the Backstop Equity that is funded (together with the OID, the Closing Payments), and (y) penny warrants attached to the Backstop Equity that are convertible, in the aggregate, for the result of (1) the proportion of the Backstop Equity that is funded, and (2) 1.5% of CF Corporations ordinary shares (on a fully diluted basis) (together with the Investment Warrants, the Warrants). |
The Closing Payments will be paid as a reduction of the purchase
price payable by the Company for the preferred shares under the
Equity Commitment Letter. CF Corporation has also agreed to pay
or reimburse the Company for fees and expenses of counsel in
connection with its anticipated purchase of the preferred equity.
price payable by the Company for the preferred shares under the
Equity Commitment Letter. CF Corporation has also agreed to pay
or reimburse the Company for fees and expenses of counsel in
connection with its anticipated purchase of the preferred equity.
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Item 2.03.
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Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information described in Item 1.01 above relating to the FNF
Commitment, FNF Equity Commitment Letters, and Investor Agreement
and the information set forth below under Item 8.01 relating to
the equity commitment letter and forward purchase backstop equity
commitment letter described therein is incorporated herein by
reference into this Item 2.03.
Commitment, FNF Equity Commitment Letters, and Investor Agreement
and the information set forth below under Item 8.01 relating to
the equity commitment letter and forward purchase backstop equity
commitment letter described therein is incorporated herein by
reference into this Item 2.03.
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Item 8.01.
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Other Events.
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In connection with that certain Share Purchase Agreement, dated
May 24, 2017, among CF Corporation, FGL US Holdings Inc., a
Delaware corporation and wholly owned indirect subsidiary of CF
Corporation (Parent) and Front Street Re (Delaware) Ltd. (FSRD),
the Company entered into an equity commitment letter with CF
Corporation with terms substantially similar to the Equity
Commitment Letter described above, to which the Company has
committed to purchase equity of CF Corporation (the terms of
which are described above under Investment Agreement) for an
aggregate cash purchase price equal to (x) $8 million plus (y) up
to an aggregate of $7 million to offset any redemptions of CF
Corporations ordinary shares made in connection with CF
Corporations shareholder vote to approve the Business
Combination.
May 24, 2017, among CF Corporation, FGL US Holdings Inc., a
Delaware corporation and wholly owned indirect subsidiary of CF
Corporation (Parent) and Front Street Re (Delaware) Ltd. (FSRD),
the Company entered into an equity commitment letter with CF
Corporation with terms substantially similar to the Equity
Commitment Letter described above, to which the Company has
committed to purchase equity of CF Corporation (the terms of
which are described above under Investment Agreement) for an
aggregate cash purchase price equal to (x) $8 million plus (y) up
to an aggregate of $7 million to offset any redemptions of CF
Corporations ordinary shares made in connection with CF
Corporations shareholder vote to approve the Business
Combination.
In connection therewith, on May 24, 2017, the Company also
entered into a forward purchase backstop letter agreement with
BTO Fund and CF Corporation with terms substantially similar to
the Forward Purchase Backstop Equity Commitment Letter described
above, to which the Company has committed, on the terms and
subject to the conditions set forth therein, at the Closing, to
purchase, or cause the purchase of, equity of CF Corporation for
an aggregate cash purchase price equal to two-thirds (2/3) of the
FPA Shortfall, up to an aggregate amount of $6 million.
entered into a forward purchase backstop letter agreement with
BTO Fund and CF Corporation with terms substantially similar to
the Forward Purchase Backstop Equity Commitment Letter described
above, to which the Company has committed, on the terms and
subject to the conditions set forth therein, at the Closing, to
purchase, or cause the purchase of, equity of CF Corporation for
an aggregate cash purchase price equal to two-thirds (2/3) of the
FPA Shortfall, up to an aggregate amount of $6 million.
About Fidelity National Financial, Inc. (NYSE:FNFV)
Fidelity National Financial, Inc. (FNF) is a holding company. The Company is a provider of title insurance, technology and transaction services to the real estate and mortgage industries. The Company’s segments include Title, Black Knight, FNF Core Corporate and Other, Restaurant Group, and FNFV Corporate and Other. Its business is organized into groups, including FNF Core Operations and FNF Ventures (FNFV). The Company offers title insurance through its title insurance underwriters: Fidelity National Title Insurance Company, Chicago Title Insurance Company, Commonwealth Land Title Insurance Company, Alamo Title Insurance and National Title Insurance of New York Inc., which collectively issue more title insurance policies than any other title company in the United States. The Company, through its subsidiary, ServiceLink Holdings, LLC (ServiceLink), provides mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. Fidelity National Financial, Inc. (NYSE:FNFV) Recent Trading Information
Fidelity National Financial, Inc. (NYSE:FNFV) closed its last trading session up +0.25 at 13.95 with 880,270 shares trading hands.
