The Blackstone (BX) and GE (GE) buy-out of mortgage and vehicle leasing company PHH fell apart. The reason given was lack of availability of financing. In truth, PHH (PHH) is in a business that is currently as far out of favor on Wall St as an industry can get.
According to Bloomberg "GE agreed on March 15 to buy PHH, sell the mortgage division to New York-based Blackstone and keep the vehicle- leasing unit. The acquisition price was $31.50 a share." PHH shares currently trade below $18.
The company’s third quarter results were reason enough to cause a buyer to walk. Revenue fell almost 10% to $484 million and the net loss increased over five-fold to $38 million.
No one should be surprised if the shares go below $15 and stay there for some time.
Douglas A. McIntyre
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