![]()
- Why the Dollar Will Likely Stay Weak for Some Time
- Wall Street 'Bonuses' Disappear—but Only in Name
- Bear, Lehman Execs Weren't Wiped Out by Crisis: Study
- How Real Estate Investors Skew Housing's Reality
- Vioxx Showed Risk Signs Before Being Pulled: Report
- Even Buffett's Huge Fame Can't Help the Name 'Warren'
- Wave of Debt Payments Facing US Government
- JPMorgan's Dimon Could Succeed Geithner: Report
- Suze Orman’s 'A Healthier, Wealthier You'
- Gold Prices Can Double in 3 Years: Portfolio Manager
- Nov. 23: Unusual Volume Leaders
- Help Wanted—Please Run $4 Billion University
- Apple Comes to AT&T's Rescue
- Rally Could 'Have Some Legs in 2010': Market Strategist
- Investors May Skew Housing Reality
- Buffett's Wealth and Fame Hasn't Helped 'Warren' As a Name
- Are Crazy Retail Deals Good for Business?
- Expect a 'Square Root-Shaped' Recovery: Chief Investor
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Existing-Home Sales Jump To Highest Level in 2-1/2 Years
- Paul: Audit the Fed
- Wave of Debt Payments Facing US Government
- TV Retailer QVC Joins 'Black Friday' Frenzy
- Start-Up Proves Everything Really Is Better With Bacon
- Buffett's Wealth and Fame Hasn't Helped 'Warren' As a Name
- Madoff—The Holiday Drink
- S&P Stocks Trading at New 52-Week Highs
- Nov. 23: Unusual Volume Leaders
H&R Block [HRB
Loading...
()
] said Friday it agreed to sell its Option One Mortgage unit to an affiliate of private equity firm Cerberus Capital Management, ending a months-long search for a buyer of the beleaguered subprime lender.
Cerberus, which created a company called OOMC Acquisition to execute the purchase, agreed to pay $300 million less than the value of Option One's tangible net assets, which was $1.27 billion at the end of January. The value will be calculated on the date of closing, which is expected to be Oct. 31.
Late Thursday, H&R Block, whose primary business is tax preparation services, said it expects a full-year loss because of charges reflecting the diminished value of Option One, which lends to people with poor credit. On Friday, H&R Block put those charges at $290 million to $320 million.
Subprime lenders have seen earnings dry up in recent months amid a surge in borrower defaults caused by falling home prices and higher interest rates. More than two dozen have gone bankrupt. H&R Block has been trying to get out of the business since last November and has trimmed operations at Option One, which is based in Irvine, Calif., by closing branches and cutting staff.
The deal does not include Option One's H&R Block Mortgage unit, which originates loans with retail customers. H&R Block plans to close that unit before the sale and take a pretax charge of $25 million to cover severance and closing costs.
H&R Block was advised by Goldman Sachs on the deal.
Separately, H&R Block reiterated Thursday it expects to report a net loss for fiscal 2007, hurt by a surge in defaults on subprime mortgages that resulted in a lower value for Option One.
The company expects to record a pretax, noncash impairment charge of $152.5 million on its investment in Option One.
On an adjusted basis, which excludes the charge, H&R Block expects earnings of $1.15 to $1.25 a share in the current fiscal year, which ends April 30.
Analysts polled by Thomson Financial are looking for profit of $1.17 a share.
- The show attracts a big TV audience every year, but this year it may take on even more importance.
- …you'll want to be prepared. Tips for getting the most out of the post-Thanksgiving shopping frenzy.
- Congressman Ron Paul explains to Squawk Box why he’s pushing legislation to audit the Federal Reserve.
- CNBC’s Phil LeBeau took a test drive of GM’s flagship electric car. Here’s what he thought of the Volt.
- The energy company Power Efficiency is building tools that regulate the power electric motors use.
- CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.













