Fairfax wraps Odyssey Re tender; Equifax to buy IXI; Bank of America to sell First Republic

By Stephanie N. Rotondo

Portland, Ore., Oct. 21 - Fairfax Financial Holdings Ltd. completed its tender offer for shares of Odyssey Re Holdings Corp. on Wednesday.

Equifax Inc. announced that it will acquire IXI Corp. in an all-cash deal. Though it is difficult to know IXI's financial position - the company is privately held - some see the deal as merely an extension of Equifax's business. The parties have already been collaborating in recent months.

Also, Bank of America Corp. said it agreed to sell off First Republic Bank to a group of investors. The terms of the deal were not disclosed.

Looking forward, Adobe Systems Inc.'s tender offer for Omniture Inc. shares is slated to expire on Thursday.

Good earnings helped give the equity market a boost, though indexes ended the day in the red.

The Dow Jones Industrial Average fell back below the 10,000 mark, losing 90.01 points, or 0.90%, to end at 9,951.47. The Nasdaq Composite meanwhile dropped 14.41 points, or 0.67%, to 2,149.06, while the Standard & Poor's 500 index declined 9.95 points, or 0.91%, to 1.081.11.

Fairfax wraps Odyssey tender

Fairfax completed its $65.00-per-share cash tender offer for Odyssey, a deal valued at about $1 billion.

The parties agreed to the merger in mid-September, and the tender offer began Sept. 24.

According to a regulatory filing published on Tuesday, Fairfax held approximately 42.39 million shares of Odyssey's 58.43 million outstanding shares. The tender offer was for the remaining 16.03 million outstanding shares.

"They have gotten approvals, and it is meant to close," said an analyst familiar with the deal. He likened the merger to purchasing dinnerware.

"Say you have six table settings and you buy two more," he explained. "You're not buying anything new, you are just completing the set to fill the table."

The analyst noted that Fairfax has historically owned anywhere from 55% to 80% of Odyssey.

"All they are doing is buying into something they already had," he said.

Fairfax's shares dropped $3.03, or 0.83%, to $360.22, while Odyssey's gained 2 cents, or 0.03%, to $64.99.

Fairfax is a Toronto-based provider of property and casualty insurance and reinsurance and investment management services. Odyssey is a Stamford, Conn.-based provider of property and casualty reinsurance products.

Equifax to buy IXI

Equifax, the Atlanta-based credit bureau, announced that it intends to acquire IXI in an all-cash deal.

Equifax said it will pay $124 million for the company. IXI is a privately held wealth and asset data researcher based in McLean, Va.

"IXI's data, sourced through more than 95 leading banks, brokerage firms and other financial entities, is the most comprehensive database of invested and deposited consumer wealth in the country," according to an Equifax press release. "IXI directly measures data on more than $10 trillion in U.S. consumer assets and investments, representing more than 42% of all U.S. consumer invested assets."

"We have worked closely with Equifax over the last 18 months and know their people, the solutions they offer, and their culture," said Tom Dailey, IXI's president and chief executive officer, in the release. "I am convinced this will be a strong combination that will benefit customers and employees of both companies."

"Bringing together the differentiated data and analytic capabilities of each of the companies will allow us to deliver a deeper view of the consumer that includes wealth, credit, income, spending and other demographic data," Dann Adams, president of Equifax consumer information solutions, said in the release.

But because IXI is privately held, it is difficult to know whether the planned acquisition is a good deal or not, according to Wayne Johnson, an analyst with Raymond James.

"It's hard to know, because I don't know what the value of IXI is," he said in an interview with Prospect News.

That being said, based on certain assumptions, the deal might not be a terrible one.

"The fact that [Equifax is] getting into that space is an extension of their current business," he explained, noting that it is "all about recurring service revenues."

Equifax, he said, has about a 30% operating margin. He expects that IXI's margins must be similarly high.

"Sometimes it is hard for them to find companies that are as profitable as they are," he said of Equifax. "This kind of deal would fit into those parameters."

Equifax's equity dropped 10 cents, or 0.35%, to $28.52.

BofA to sell First Republic

Bank of America announced that it entered into an agreement to sell San Francisco-based First Republic Bank.

The purchasers include "a number of investors, led by First Republic's existing management, and including investment funds managed by Colony Capital, LLC and General Atlantic LLC," according to a press release.

Bank of America did not disclose the terms of the transaction.

The Charlotte, N.C.-based financial institution acquired First Republic on Jan. 1, 2009 as part of its Merrill Lynch & Co. Inc. acquisition. As of Sept. 30, First Republic had $19 billion in assets, $16 billion in deposits and $15 billion in wealth management assets under management.

The transaction is expected to close in the second quarter of 2010.

Bank of America's stock declined 41 cents, or 2.41%, to $16.60

Adobe tender set to expire

Adobe subsidiary Snowbird Acquisition Corp. is slated to complete a $21.50-per-share tender offer for all of Omniture's outstanding stock on Thursday.

As previously reported, Orem, Utah-based Omniture agreed to be bought out by Adobe for approximately $1.8 billion.

Upon completion of the tender, San Jose, Calif.-based Adobe will purchase any remaining Omniture shares in a second-step merger.

The transaction is expected to close in the fourth quarter.

Adobe's shares fell 63 cents, or 1.78%, to $34.78, as Omniture's dropped 3 cents, or 0.14%, to $21.45.

Adobe is a business and mobile software and services company, and Omniture develops online business optimization software.

Mentioned in this article:

Adobe Systems Inc. Nasdaq: ADBE

Bank of America Corp. NYSE: BAC

Equifax Inc. NYSE: EFX

Fairfax Financial Holdings Ltd. NYSE: FFH

Odyssey Re Holdings Corp. NYSE: ORH

Omniture Inc. Nasdaq: OMTR

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