In keeping with a theme I started, another interesting spinoff idea came through my inbox the other day. Fidelity National Finance (NYSE:FNF), a provider of real estate, financial, and title services, submitted its registration to spin off its title insurance businesses to shareholders. The company would be named Fidelity National Title Group, and the proposed ticker is FNT. Stockholders would get 0.175 FNT shares for every FNF share they own, while Fidelity National retained the remaining 82.5% of shares. You can view a copy of the S-1 form here.

According to data from E*Trade (NYSE:ET), Fidelity National earned about $1.25 billion over the past 12 months. Given its current market capitalization of more than $6.35 billion, Fidelity National has a P/E ratio of 5.2 on a trailing-12-month basis.

According to the S-1 statement, the title insurance group earned $531 million (about 42%) of those aforementioned dollars during those same 12 months. Based on the P/E of 5.2, the market is valuing the title insurance business at around $2.76 billion on a trailing basis.

The five businesses that compose the title insurance group -- Alamo Title, Chicago Title, Fidelity National Title, Security Union Title, and Ticor Title -- collectively command a 31% share of their market. But how is the market evaluating their competitors? Investors Title Company (NASDAQ:ITIC) is a small pure-play, while First American (NYSE:FAF) and LandAmericaFinancial (NYSE:LFG) offer additional services.

First American 10.4
LandAmerica 7
Investors Title 10.1
Average 9.2
(TTM P/E ratios calculated using income statement data from E*Trade.)

Obviously, P/E is partly based on expectations of growth, profitability, and other factors. But at first glance, it's clear that Fidelity National's management believes the market doesn't fully appreciate the value of its title insurance businesses -- otherwise, why spin them off?

Assuming a maximum P/E of 9.2, the spinoff could be worth nearly $4.5 billion. It's too early to say whether the new company might actually be trading at a 50% discount, but there's certainly enough motivation to dig deeper and find out.

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Fool contributor David Meier does not own shares in any of the companies mentioned. The Motley Fool has a disclosure policy.