Fifth Third Bancorp
) is contemplating the divesture of a part of its
) stake. In this connection, an S-1 registration statement has
been filed with the Securities and Exchange Commission. The
company plans to sell up to 10.55 million shares of Vantiv.
Fifth Third's sale of shares of Class A common stock of Vantiv
would materialize once the registration statement has been stated
effective. If accomplished, it would mark Fifth Third's first
sale of Vantiv's stock since the latter's initial public offering
(IPO) in March 2012.
The offering would help Fifth Third earn proceeds for corporate
purposes. This likely comprises the use of funds for optimizing
its balance sheet and liability costs as well as buyback of its
own common shares.
The Back Story
U.S.-based Vantiv, formerly known as Fifth Third Processing
Solutions ("FTPS"), is a payment processing company dealing with
more than 12.9 billion payment transactions valued at $426
Fifth Third had spun-off FTPS in 2009 after which a joint venture
was initiated between Advent International and Fifth Third Bank,
a subsidiary of Fifth Third. The company was named Vantiv in June
2011. Notably, Vantiv Inc. opted for an initial public offering
of Class A shares on the company. The offering was completed on
March 21, 2012.
Earlier in 2012, Fifth Third completed the buyback of its shares
worth $75 million, which were made as per regulatory approval
that the company had received in March and were supported by the
realized gains from the Vantiv IPO.
Any measures that would help optimize balance sheet as well as
share buybacks is encouraging and represent an efficient use of
funds. Such actions would help create value for shareholders.
For Fifth Third, which currently retains a Zacks #3 Rank
(implying a short-term Hold rating), this is could serve as a
slight positive for the company resulting in modest upward
estimate revision. This, in turn, could help Fifth Third achieve
a better Zacks Rank.
FIFTH THIRD BK (FITB): Free Stock Analysis
VANTIV INC-A (VNTV): Free Stock Analysis
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