Fidelity National agrees to review, director adds after DE Shaw pressure
NEW YORK, Dec 15 (Reuters) – Fidelity National Information Services ( FIS.N ) said on Thursday it will undertake a strategic review and add a new director to its board following pressure from hedge fund DE Shaw Group.
The FIS also said it would speed up management changes, with Stephanie Ferris, who was scheduled to become chief executive in January, taking the top job on Friday and Gary Norcross, a 34-year FIS veteran who has been chief executive since 2015, leaving the company .
Mark Ernst, who had been executive vice president and CEO of Fiserv, a global fintech and payments company that competes with FIS, joins the board.
Shares of FIS climbed 3.5% in premarket trading, but fell after the open to trade at $71.20 as the broader market was also lower.
“We are looking closely at all aspects of our company to define areas for change and develop specific action and improvement plans,” Ferris said in a statement.
Ferris and the board will lead the review, which will evaluate the company’s business structures and assets, as well as focus on cutting costs and improving margins.
FIS, a maker of technology for banking and merchant payments, has seen its share price fall in recent years as investors grew frustrated with how its three main businesses were linked.
Ferris had been FIS president where she led the integration of Worldpay and managed the company’s global business strategy.
FIS said in October that Norcross, who was chairman and earned his reputation as a dealmaker, would become executive chairman in 2023. FIS said on Thursday that it had now appointed Jeffrey Goldstein, currently the lead independent director, as independent chairman instead.
The changes come after weeks of discussions with DE Shaw, which owns an unspecified stake in FIS, which is valued at $43 billion. Shares have fallen 32% over the past 52 weeks and closed at $72.41 on Wednesday.
DE Shaw, who oversees $60 billion in assets and occasionally pushes for changes at companies, urged FIS to review its business configuration and structure in light of the company’s significant valuation discount to its peers.
The hedge fund also wanted to see changes to the board and an accelerated pace of change in the management team, people familiar with the talks said.
Activist investment firm Jana Partners had also invested in FIS and recently approached the company to push for a strategic review that could potentially see the company broken up and for immediate changes in the C-suite, one of the sources familiar with the matter said. .
The two activists did not know the other’s plans or proposals, the sources said.
When DE Shaw urges corporate boards to rethink strategy, the hedge fund prefers to keep conversations out of the spotlight, often appearing publicly only after a deal is signed. Earlier this year, DE Shaw settled with package delivery firm FedEx ( FDX.N ) to add two directors and have a say in appointing a third.
That pushed Verisk Analytics ( VRSK.O ) to become a pure insurance data business, and in October Verisk announced a deal to sell its energy consulting arm, Wood Mackenzie.
Jana has often been more public in her campaigns.
Reporting by Svea Herbst-Bayliss; editing by Jason Neely and Alexander Smith
Our standards: Thomson Reuters Trust Principles.