| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers P > Headlines for PHH Corp. > News item |
PHH receives fee in connection with failed merger
By Lisa Kerner
Charlotte, N.C., Jan. 4 - Blackstone Capital Partners V LP paid a $50 million reverse termination fee to PHH Corp. The payment was made in connection with the termination of the merger agreement between PHH and General Electric Capital Corp. and an agreement under which Blackstone was to acquire PHH's mortgage banking business from GE Capital.
On Jan. 2, PHH announced it was terminating its merger agreement with GE Capital because the merger was not completed by Dec. 31 as required under the companies' merger agreement.
Pearl Mortgage Acquisition 2 LLC, a Blackstone affiliate, was unable to obtain the required debt financing for the purchase.
PHH agreed to pay up to $4.5 million in fees to third-party consultants retained by Blackstone in connection with the contemplated transactions, a company news release stated.
GE Capital had agreed to acquire PHH in an all-cash transaction to take the company private for $31.50 per share, or approximately $1.8 billion.
"Over the last several months, Blackstone sought to find a way to secure replacement financing for their transaction in the face of unprecedented disruption in the mortgage financing markets," PHH's non-executive chairman A.B. Krongard said in the release.
"Despite their efforts with both their original lender group and other possible lenders, an unprecedented crisis in confidence in the mortgage sector no doubt made it impossible for them to secure the committed funding as originally contemplated in March," Krongard added.
PHH is a Mount Laurel, N.J., outsource provider of mortgage and vehicle fleet management services.
Danbury, Conn.-based GE Capital provides leasing, lending and capital investment products and services.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.