Merger Plan Boosts Rival Title Company
The pending $1.2-billion merger between Irvine-based Fidelity National Financial Inc. and Chicago Title Corp. appears to be helping the stock of at least one competitor that investors are betting may be the next takeover target.
Shares of Richmond, Va.-based LandAmerica Financial Group, the nation’s No. 2 title insurer, surged nearly 20% Wednesday to close at $29.44 a share, up $4.81.
Analysts are speculating that LandAmerica’s former parent, Reliance Group Holdings, might take advantage of the recent consolidation trend among title insurers and sell its 27% stake in LandAmerica.
One possible buyer, analysts say, is Santa Ana-based First American Financial Inc., the nation’s largest title insurer. Officials at First American and LandAmerica declined to comment. First American shares fell 4% Wednesday to close at $16.13, down 63 cents.
A Fidelity-Chicago combination would replace First American as the No. 1 title insurer. But industry experts questioned whether federal antitrust regulators would permit a combination between First American and LandAmerica, which would give the companies a 40% market share.
Meanwhile, investors continued to express skepticism about the Chicago-Fidelity deal. Chicago’s stock dropped $1.06 a share to close Wednesday at $46.13, well short of Fidelity’s $52-a-share offer. Fidelity’s stock slipped 4% to close at $17.44, down 69 cents a share.
