Activist investor Jana builds a position in payment company Fiserv
The hedge fund has communicated with the company and supports CEO Mike Lyons.
According to informed sources, activist investor Jana Partners has built a position in payment technology company Fiserv and is pushing for reform measures to boost the stock price of this underperforming company.
Details
Fiserv provides fintech services to banks, credit unions, and merchants. As of last Friday, its market capitalization was approximately $32 billion.
Due to slowing growth in its core merchant solutions business and intensified industry competition, Fiserv’s stock price plunged nearly 70% last year; it has fallen another 11% so far this year.
Last year’s sharp decline mainly occurred after CEO Mike Lyons took office, when he lowered previous profit expectations to reset Wall Street’s outlook for earnings growth, causing the company’s market cap to lose about $30 billion in a single day.
Sources said Jana has privately communicated with the Milwaukee-based company to discuss feasible plans for boosting the stock price. The investment firm believes that in the context of a favorable spending environment in the banking sector, Fiserv stands to benefit.
Sources also said that Jana supports Lyons and his focus on improving execution efficiency and refreshing the board. Lyons joined from PNC Financial in May last year, replacing former CEO Frank Bisignano, who left to join the Trump administration.
It is currently unclear how large Jana’s stake is or whether the firm will seek a board seat.
A Fiserv spokesperson stated in a statement:
“In recent months, we have communicated with numerous shareholders, including Jana Partners. As we advance the ‘One Fiserv’ action plan, we value shareholder input.”
Background
According to sources, Jana’s investment also involves at least one bank executive with M&A experience.
Jana hopes Fiserv will:
- Accelerate growth of its core banking franchise business
- Conduct strategic reviews and divest non-core assets
Sources added that Jana does not intend to push Fiserv to separate its payments business from its fintech operations — the firm had successfully lobbied FIS to pursue this strategy in 2022.
Lyons has recently announced new strategic initiatives, including the “One Fiserv” plan, focusing on winning new enterprise clients and engaging in long-term capital planning. Sources said Jana supports this plan.
In the second half of last year, Fiserv hired a new chief financial officer and appointed two co-presidents for its core business divisions; it also recently added three independent directors to the board.
Recently, Jana has also pushed for reforms at medical device manufacturer Cooper Companies and diversified holding company Markel Group, both of which are undergoing their own strategic reviews; the firm has also urged digital banking platform provider Alkami Technology to explore a potential sale.
Editor: Guo Mingyu
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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