Shares in Total System Services Inc. climbed Tuesday after Jim Cramer said on his popular television show "Mad Money" that the company could be a spinoff candidate.
Mr. Cramer said during Monday's program that the wave of acquisitions in the financial service and transaction processing market has bypassed TSYS because it is majority-owned by Synovus Financial Corp. but that Synovus is almost certainly aware that its processing operation could be worth a substantial amount to a buyer.
"Normally, you wouldn't catch me dead recommending a subsidiary instead of the parent," Mr. Cramer said. "But, in this case, I think that, if Synovus would wake up and smell the private equity, then this $32 TSS could see $40 before you know it."
Synovus, of Columbus, Ga., owns 81% of TSYS. It has been considering spinning off TSYS since last year and said in September that it was actively evaluating the pros and cons of such a move. The banking company's chief executive, Richard Anthony, said in March that a decision could be made by yearend.
TSYS shares were trading at $34.06 Tuesday morning, up 4.99% from Monday's closing price.
First Data Corp., TSYS' biggest rival in the transaction processing market, said last month that it had agreed to sell itself to the New York private-equity company Kohlberg Kravis Roberts & Co. for $29 billion.
First Data shareholders are to receive $34 per share, a premium of 26% over its closing price on March 30.
