Fidelity National Financial Inc., which has a number of investments in companies unrelated to its main title insurance business, is creating a “tracking stock” for its portfolio investments.
Jacksonville-based Fidelity said Friday it is putting all of those investments into a new subsidiary called Fidelity National Financial Ventures, or FNFV, and will distribute a class of shares to Fidelity stockholders that will track the performance of the FNFV companies.
FNFV will include Fidelity’s majority investments in several restaurant chains and auto parts company Remy International Inc. It also includes a 32 percent interest in Ceridian, a company which provides human resources services for businesses.
According to the Securities and Exchange Commission, shareholders typically have limited or no voting rights in a tracking stock, but otherwise it’s similar to any other common stock.
The tracking stock trades separately from the regular stock
and its price tends to go up or down based on the performance of the businesses in the tracking stock.
Fidelity, which closed Thursday at $30.34 a share, estimates the value of FNFV at $4.77 per Fidelity share.
“We believe that separating the portfolio company investments into a tracking stock will provide greater transparency and clarity both to the inherent value of our portfolio company investments and the cash earnings capabilities of our core real estate, technology and mortgage services businesses. Our ultimate goal is to help investors more easily value our company and maximize returns for all of our shareholders,” Fidelity Chairman Bill Foley said in a news release.
Fidelity expects the process to create and distribute shares in the tracking stock to take up to six months.
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