PHH Corp., a top provider of mortgages and services for managing vehicle fleets, said Tuesday it ended a $1.8 billion agreement to be bought by General Electric Capital Corp. and The Blackstone Group because the private equity company could not line up financing for the deal.
General Electric Capital, the consumer and commercial finance unit of General Electric Co., and Blackstone agreed in March to acquire Mount Laurel-based PHH.
PHH also said Tuesday it is seeking a $50 million termination fee from Blackstone.
"I am disappointed that we could not conclude the transactions contemplated by the merger agreement," PHH Chairman A.B. Krongard said in a statement. "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."
An attempt to reach Blackstone officials on the New Year's Day holiday was not successful. The acquisition had been thrown into doubt in September, when Blackstone said it might have a financing shortfall of up to $750 million amid a recent tightening in credit markets.
The agreement called for GE to sell PHH's mortgage business to Pearl Mortgage Acquisition 2, an affiliate of Blackstone. PHH said Tuesday it called off the sale because it had not been completed by Dec. 31, as stipulated by the agreement.
PHH Mortgage, which formerly did business as Cendant Mortgage, is among the top 10 originators of residential mortgage loans in this country.
PHH Arval, the fleet management subsidiary, accounts for more than two-thirds of company sales and is the No. 2 provider of services for managing commercial fleets in the United States and Canada, according to the company.