It's been contemplated casually for years, scrutinized seriously for months and studied formally by a special committee since late July. Now, it appears, Synovus Financial Corp. is poised this week to cut the proverbial apron strings from a credit-card processing offspring that has grown from $15 million in revenue at its publicly traded birth in 1983 to nearly $1.8 billion in revenue last year at age 23.
A decision could come by Thursday on whether or not TSYS, incorporated as Total System Services, should be spun off as an independent company from Synovus, a regional bankholding firm with Columbus roots dating to 1888.
Both companies were hesitant to comment Friday on the potentially historic moment.
"Neither Synovus or TSYS are going to make any further comment publicly about spin-related issues until the committee and the board have concluded their work and they are ready to announce a decision," said Alison Dowe, director of communications at Synovus.
Management is playing the decision very close to the vest, with U.S. Securities and Exchange Commission regulations prohibiting any advance signals or insider information that might influence either firms' stock price.
But those watching the scenario unfold are betting Synovus and its board of directors will pull the trigger on a corporate spinoff that could yield nearly $5 billion for TSYS to grow its business, particularly overseas.
"I think it's likely, but that's just a gut feeling," said David Robertson, publisher of The Nilson Report, a California-based periodical that tracks the card-processing industry in which TSYS is involved.
"I think it's always a good move when a company that's got as much on the ball as TSYS does to get out from underneath a parent company that sometimes has other interests in mind," he said.
Investment securities and management firm Stifel Nicolaus & Co. has been tracking the spinoff deliberations and how such a move might impact Synovus and TSYS.
John Shinkle, senior vice president and manager of Stifel's Columbus office — and a former Synovus securities broker — said he expects a spinoff to occur. He also said interest in the topic has been extremely high in the community ever since Synovus announced on July 24 that a special committee would study the issue and make a recommendation.
"It's the talk of the town," Shinkle said. "Everybody's waiting to see what it's going to be. And, then, what does it mean once they do it is the next question."
Stifel Nicolaus analysts Tony Davis and Ed Timmons, in a research report dated Sept. 17, laid out several possibilities that could result from a spinoff.
For Synovus, which now owns 81 percent of TSYS stock, it could lead to a cash infusion of an estimated $324 million from a one-time dividend payout to shareholders, the report said.
The company could use the money to purchase small to mid-size banks in the Southeast to strengthen its five-state footprint. Or the firm might use the proceeds to buy back up to 10 million shares of its own stock, boosting 2008 earnings per share by 2 cents.
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