Wells Fargo to Sell Shareowner Services Business for $227 Million--Update

By Razak Musah Baba Features Dow Jones Newswires

U.S. international financial services group Wells Fargo & Co (WFC) is selling its Share Registration & Services business, or WFSS, to the U.K.'s Equiniti Group PLC (EQN.LN) for $227 million.

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Equiniti, which provides payment services, said Wednesday it plans to buy WFSS to create a multi-national share registration and services business. Equiniti said the acquisition will be conditional on the approval of Equiniti's shareholders at a general meeting in September.

Equiniti said the deal will be financed from a $160 million fully-underwritten rights issue and $155 million in fully-underwritten new debt facilities.

The acquisition is expected to complete during the fourth quarter of 2017.

Equiniti also said it expects significant cost savings of at least $10 million a year by the third full year of ownership.

At 0730 GMT, Equiniti shares were up 9 pence, or 3.6%, at GBP2.53, valuing the company at GBP754.7 million ($967.5 million).

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-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

LONDON--Wells Fargo & Co. (WFC) agreed to sell its shareowner services business to the U.K.'s Equiniti Group PLC (EQN.LN) for $227 million.

Wells Fargo said Wednesday that its shareowner business provides services like stock transfer and registrar as well as other corporate actions to more than 1,200 public and private companies in the U.S. Equiniti, which provides share registration and associated investor services in the U.K., said the deal would help it to expand globally.

As part of the deal, more than 400 Wells Fargo workers are expected to transition to Equiniti.

Equiniti said it would finance the deal from a $160 million rights issue and $155 million in new debt. Equiniti also said it expected cost savings of at least $10 million a year by the third full year of ownership.

The acquisition, pending regulatory and Equiniti shareholder approvals, is expected to close before the end of the year.

In afternoon trading in London, Equiniti shares added 9.5% to GBP2.66. Wells Fargo shares slid 0.3% to $54.88 in premarket trading in the U.S.

-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

July 12, 2017 09:21 ET (13:21 GMT)