PHH Corporation has announced it has terminated an agreement to sell the company to the General Electric Capital Corp. unit of General Electric, previously agreed to on March 15, 2007. The deal was to be followed by GE’s sale of PHH’s mortgage business to Pearl Mortgage Acquisition 2 LLC, an affiliate of the Blackstone Group.
However, Pearl was unable to obtain debt financing to complete the agreement, and the deal was terminated because the sale was not completed before December 31, 2007. Observers have speculated that the deal fell apart due to the volatility of the credit market.
"I am disappointed that we could not conclude the transactions contemplated by the Merger Agreement,” said A. B. Krongard, PHH chairman. “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."