UPDATE 1-Insurer, buyout firm in talks to buy Lender Processing -source

Wed May 22, 2013 8:51pm EDT

* Fidelity National Financial, Thomas H Lee are the buyers -source

* Deal would be worth $2.9 bln - WSJ

* To be a cash and stock deal - WSJ

May 22 (Reuters) - Title insurer Fidelity National Financial Inc and buyout firm Thomas H. Lee Partners are in advanced talks to acquire mortgage service provider Lender Processing Services Inc, a source familiar with the matter said.

The deal, worth about $2.9 billion, would value Lender Processing shares at around $33 per share, the Wall Street Journal reported earlier on Wednesday, citing people familiar with the matter.

The buyers would pay with a mix of cash and Fidelity National Financial stock, the paper said, adding that Thomas H. Lee would hold a 19.9 percent stake in Lender Processing.

The deal could be announced as soon as early next week, the source told Reuters.

Fidelity National and Lender Processing Services were not immediately available for comment. Thomas H. Lee declined to comment.

If the deal is completed, Lender Processing Services would become a subsidiary of Fidelity National Financial, the Wall Street Journal said.

Shares of Lender Processing closed down 3.2 percent at $29.11 on Wednesday on the New York Stock Exchange, while those of Fidelity National Financial were down 4 percent at $24.37.

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