PHH's ( PHH) said Tuesday that its planned $1.69 billion acquisition by GE ( GE) and Blackstone ( BX) is dead.
The two-part deal fell apart because Pearl Acquisition, a Blackstone affiliate that was to acquire PHH's mortgage business, failed to secure sufficient debt financing, according to a PHH press release . Investors have been aware of the acquisitions's imperiled status for months, ever since doubts emerged about Pearl's ability to obtain financing. Mount Laurel, N.J.-based PHH agreed to the deal last March, before the summer's subprime-related credit crisis hit. Under terms of the deal, GE's General Electric Capital unit would have purchased PHH and then immediately its mortgage business to the Blackstone unit. GE would have kept PHH's vehicle fleet management business. "I am disappointed that we could not conclude the transactions contemplated by the Merger Agreement," said A. B. Krongard, nonexecutive chairman of PHH. "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 shares finished Monday's session down 14 cents at $17.64.