The customers of Lender Processing Services, Inc. (LPS
) are mortgage originators and servicers. The company supplies information technology "IT" to enable efficient mortgage processing and provides services that allow the customers to outsource many associated functions. Some of the services entangled the company in "robo signing" and the resulting lawsuits caused a sharp decline in its share price. In time most of the legal issues were resolved and its former parent Fidelity National Financial, Inc. decided the IT segment would enhance its product offerings, while substantial savings were available in merging its mortgage services with those of Lender Processing Services, Inc. Since the acquisition proposal is for cash and FidelityNational Financial, Inc. common stock, an analysis of Fidelity National Financial, Inc. was undertaken. The conclusion was that the new company is not attractive at this time. Consequently, holdings in Lender Processing Services, Inc. with a duration greater than one year were liquidated.
From Westport Asset Management
's second quarter 2013 letter