Fiserv Catches Eye of Activist Investor Jana Partners

Now, Jana is campaigning for changes to boost Fiserv’s underperforming stock, The Wall Street Journal (WSJ) reported Tuesday (Feb. 17), citing sources familiar with the matter.

As the WSJ notes, Fiserv, which offers FinTech services to banks, credit unions and merchants, saw its shares plunge nearly 70% last year amid cooling growth in its merchant solutions business and increased industry competition.

Sources told the WSJ that Jana has held private discussions with Fiserv on ways to boost its stock, arguing that the company could benefit from a robust spending environment for banks.

The sources also say Jana supports Fiserv CEO Mike Lyons’ effort to improve execution and refresh the company’s board. Lyons joined the company from PNC last year when former Fiserv chief Frank Bisignano was named commissioner of the Social Security Administration (and later, CEO of the IRS).

“During the past several months, we have engaged with many of our shareholders, including Jana Partners,” a spokesperson for Fiserv said in a statement to the WSJ. “We value shareholder perspectives as we drive progress through our One Fiserv action plan.”

According to the report, the sources say Jana is working with at least one banking executive with a background in dealmaking. The investor group wants Fiserv to strengthen its banking business while holding a review to shed nonstrategic assets.

However, Jana is not expected to lobby for Fiserv to cleave its payments and FinTech businesses, the sources said.

Lyons said last fall that the company was undertaking a “critical and necessary reset” and that Fiserv’s internal analysis had “identified certain competitive and client service gaps which we are actively working to fill and are confident that with focused investment we can fully address.”

The company’s falling stock price also caught the notice of two Democratic U.S. senators, Elizabeth Warren of Massachusetts and Ron Wyden of Oregon. One week after the company’s share price plummeted, the senators wrote to Fiserv questioning Bisignano’s leadership.

“At a minimum, Mr. Bisignano appears to have failed to manage Fiserv effectively, and may have misled investors and the public about the company’s financial status,” their letter said.

In other Fiserv news, the company last week introduced INDX, a real-time cash-settlement platform for digital asset companies, designed to help those firms securely store and transfer U.S. dollars in real time and around the clock.

Rather than routing funds outside of traditional banking systems or moving them on-chain, INDX distributes companies’ funds across Fiserv’s network of more than 1,100 insured U.S.-based financial institutions.