Fifth Third (FITB) Issues Update on Estimated Impact of Vantiv's (VNTV) IPO, Sees Gain of ~$60M
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Financial Fact:
Total noninterest income: 840M
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Fifth Third Bancorp (Nasdaq: FITB) today updated the following estimated effects to Fifth Third related to the recent actions of Vantiv, Inc. (NYSE: VNTV).
The underwriters of Vantiv, Inc.’s previously announced initial public offering of common stock have exercised in full their option to purchase an additional 4,411,800 shares of Vantiv, Inc. Class A common stock at the public offering price of $17.00 per share. Vantiv, Inc., in turn, used a portion of the proceeds from this sale to purchase 2,086,064 Class B units of Vantiv Holding, LLC from Fifth Third. As a result of this purchase, an equivalent number of shares of Class B common stock of Vantiv, Inc. held by Fifth Third will be cancelled.
Fifth Third previously announced that it expected to recognize a pre-tax gain of approximately $95 million (approximately $60 million after-tax) during the first quarter of 2012 related to the Vantiv, Inc. initial public offering. The purchase pursuant to the option described above will result in an additional pre-tax gain of approximately $17 million (approximately $11 million after-tax) to Fifth Third in the first quarter of 2012.
These actions will reduce Fifth Third’s remaining economic interest to approximately 39 percent of Vantiv’s future earnings, which is accounted for under the equity method. Fifth Third continues to hold 83.9 million Class B units of Vantiv Holding, LLC which may be exchanged for Class A common stock of Vantiv, Inc. on a one-for-one basis, as well as a warrant that is exercisable and exchangeable into Vantiv, Inc. Class A common stock. These securities are subject to certain terms and restrictions.
The underwriters of Vantiv, Inc.’s previously announced initial public offering of common stock have exercised in full their option to purchase an additional 4,411,800 shares of Vantiv, Inc. Class A common stock at the public offering price of $17.00 per share. Vantiv, Inc., in turn, used a portion of the proceeds from this sale to purchase 2,086,064 Class B units of Vantiv Holding, LLC from Fifth Third. As a result of this purchase, an equivalent number of shares of Class B common stock of Vantiv, Inc. held by Fifth Third will be cancelled.
Fifth Third previously announced that it expected to recognize a pre-tax gain of approximately $95 million (approximately $60 million after-tax) during the first quarter of 2012 related to the Vantiv, Inc. initial public offering. The purchase pursuant to the option described above will result in an additional pre-tax gain of approximately $17 million (approximately $11 million after-tax) to Fifth Third in the first quarter of 2012.
These actions will reduce Fifth Third’s remaining economic interest to approximately 39 percent of Vantiv’s future earnings, which is accounted for under the equity method. Fifth Third continues to hold 83.9 million Class B units of Vantiv Holding, LLC which may be exchanged for Class A common stock of Vantiv, Inc. on a one-for-one basis, as well as a warrant that is exercisable and exchangeable into Vantiv, Inc. Class A common stock. These securities are subject to certain terms and restrictions.
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