Friday, 29 May 2015
Last updated 3 hours ago
Jan 2 2008 | 11:18am ET
The subprime debacle was good to the Blackstone Group in 2007, as the private equity giant was called in to advise some of the biggest casualties of the collapse. But this year is starting out somewhat differently: Blackstone’s lenders were not so lucky last year, and that’s forced the firm to pull the plug on a $1.8 billion buyout.
PHH Corp., the New Jersey mortgage and vehicle-leasing company which Blackstone and General Electric had agreed to buy and divide between them, said the deal had fallen apart, after Blackstone was unable to come up with the financing for its half of the arrangement. The company said it would seek a $50 million break-up fee from Blackstone.
The deal, under which GE would have bought PHH and then sold its mortgage unit to Blackstone, first ran into trouble in September, when both JPMorgan Chase and Lehman Brothers warned Blackstone that they might have to renege on the promised financing. Blackstone’s inability to come up with the money also sinks GE’s purchase of PHH.
May 27 2015 | 2:15pm ET
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