Skip navigation
Watchlist Sponsored By :


Current DateTime: 10:54:48 11 Nov 2009
LinksList Documentid: 24355697

FEATURED QUIZZES


Current DateTime: 10:54:48 11 Nov 2009
LinksList Documentid: 33793611
  • The Billionaire BFF's

      These billionaire's have led undeniably exceptional lives. In the following quiz, can you tell which responses are based on facts from Buffett's and Gates' real lives?

  • The Many Myths of Coca-Cola

      Can you tell which statements are true, and which ones are just rumors?

  • Think You Understand Markets?

      We've selected some questions from the Financial Industry Regulatory Authority's test of investor knowledge. See how you do ...


Current DateTime: 10:54:48 11 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
GE, Blackstone to Buy PHH for $1.8 Billion
By: Reuters | 15 Mar 2007 | 10:22 AM ET
Text Size

A General Electric unit and private equity firm Blackstone Group will jointly acquire mortgage and vehicle fleet management company PHH for $1.8 billion in cash, the companies announced Thursday.

The $31.50-per-share purchase price is about a 13% premium to PHH's closing stock price of $27.81 on Wednesday.

PHH shares jumped [PHH  Loading...      ()   ] in trading on the New York Stock Exchange.

PHH, which was spun off in 2005 from what was then known as Cendant Corp., consists of PHH Arval, which provides vehicle fleet management services to corporate and government clients, and PHH Mortgage, a retail originator and servicer of residential mortgages.

GE Capital Solutions, which already has a vehicle fleet management operation, will buy Mount Laurel, N.J.-based PHH and keep PHH Arval while selling PHH Mortgage to Blackstone immediately after closing.

The move comes at a time when the U.S. mortgage sector has been under pressure from weakening demand. The subprime sector, which focuses on buyers with weak credit histories, is facing record levels of defaults, and many independent lenders are facing cash crunches.

Other sectors of the mortgage market, including "alt a" loans that require little documentation from the borrower, are also weakening. Prime loans are still performing well, but many investors are concerned about subprime turmoil extending to other portions of the mortgage market and the broader economy.

GE [GE  Loading...      ()   ] is paying 16 times expected 2007 earnings of $1.95 per share, according to Reuters Estimates, which is based on one analyst's estimate.

PHH said in January it expected to post an after-tax loss of $22 million to $29 million for 2006 and return to profitability in 2007 due to $50 million in cost cuts, including a work force reduction.

The company anticipates origination of $41 billion in loans in 2007, it said in January.

The parties expect the acquisition to close in the third quarter.

Lehman Brothers advised GE and Blackstone on the transaction. JP Morgan also served as an adviser to Blackstone.

GE is the parent company of NBC Universal and CNBC.

Copyright 2009 Reuters. Click for restrictions.
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Bernard Madoff's Baseball Jacket
  • Bernard and Ruth Madoff's personal possessions will be auctioned this weekend. Click ahead to see.
  • US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
  • An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
  • Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
  • The real result of health care reform will be bloated government and higher deficits, says Larry Kudlow.
  • Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
ADD COMMENTS
Remaining characters


Current DateTime: 03:37:26 11 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:05:48 11 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 06:57:57 11 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:04 11 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters