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News Now

CU System
Sale of CU mortgage company PHH Corp. is off
MT. LAUREL, N.J. (1/3/08)--PHH Corp. announced Tuesday that it has terminated plans for its purchase by General Electric Capital Corp. (GECC), a unit of General Electric Company, and The Blackstone Group. The merger was called off because Blackstone could not finance the deal. PHH has requested a repayment of $50 million as a termination fee. The merger was to be completed Dec. 31. Under the agreement, a wholly-owned subsidiary of GECC would have merged with and into PHH. Following the merger’s closing, GECC was to sell the company’s mortgage business to Pearl Mortgage Acquisition 2 LLC. Pearl is an affiliate of The Blackstone Group. "I am disappointed that we could not conclude the transactions contemplated by the merger agreement,” said A.B. Krongard, PHH non executive chairman of the board. “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." PHH is a provider of mortgage and vehicle fleet management services. PHH purchased CUNA Mutual Mortgage in 2005, and 18 former employees of CUNA Mutual have since founded Greystone Residential Funding Inc. (News Now Aug. 8, 2007).


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