PHH Corp. has ended a $1.8 billion agreement to be bought by General Electric Capital Corp. and sold to the Blackstone Group, because Blackstone failed to line up financing for the deal.
Blackstone, a private equity company, and General Electric Capital, the consumer and commercial finance unit of Fairfield-based General Electric Co., agreed in March to acquire Mount Laurel-based PHH.
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PHH, a top provider of mortgages and services for managing vehicle fleets, is also seeking a $50 million termination fee from Blackstone.
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“I am disappointed that we could not conclude the transactions contemplated by the merger agreement,” said A.B. Krongard, PHH chairman, in a prepared statement. “The board will determine in due course whether to continue to explore the company’s strategic alternatives. The board remains focused and committed to delivering value for our stockholders regardless of the decision.”
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Blackstone officials have taken a silent position and declined to comment on the failed purchase of PHH. In September, uncertainty clouded the acquisition, when Blackstone said it possibly would have a financing shortfall of up to $750 million in the midst of tightening credit markets.
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In the agreement, GE was to sell PHH’s mortgage business to Pearl Mortgage Acquisition 2, an affiliate of Blackstone. PHH said Jan. 1 that it called off the sale because it had not been accomplished by Dec. 31, as specified by the agreement.
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PHH Mortgage, formerly known as Cendant Mortgage, is among the top 10 originators of residential mortgage loans in this country.
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According to PHH, PHH Arval, its fleet management subsidiary, accounts for more than two-thirds of company sales, and is the number two provider of services for managing commercial fleets, in the United States and Canada.
