Thursday, January 03, 2008

Blackstone misses party, sends regrets

"We regret that the banks are now unwilling to provide financing under the terms they originally agreed to."
Mortgage and vehicle fleet company PHH Corp said on Tuesday it terminated its nearly $2 billion sale to General Electric Co and Blackstone, after the private equity firm failed to obtain required financing for the deal.

PHH has requested a termination fee of $50 million from the Blackstone Group.

PHH shares closed on Monday at $17.64, down 14 cents on the New York Stock Exchange. In March, the GE and Blackstone deal valued the company at $31.50 per share...

LITTLE RED CABOOSE: Guambat tacks the following onto this post from the WSJ Deal Journal blog posted Jan. 3rd by Dana Cimilluca:
According to Dealogic, which compiled the fee data, Blackstone paid more to Wall Street banks than any other private-equity firm. (Coming in second at $617 million in fees was Goldman Sachs Group’s private-equity arm. Could that help explain why Goldman’s investment bank was the No. 1 beneficiary of such fees, reaping more than $1.5 billion?)

Blackstone paid Wall Street even more in 2006, when it shelled out $704 million for services such as debt and equity underwriting and M&A advice. The fees Blackstone paid in the second half of 2007 plummeted to $233 million, from $413 million in the first half, reflecting the paucity of buyout activity amid the credit crunch. That, in turn, might help explain why banks such as J.P. Morgan Chase and Lehman Brothers Holdings seem emboldened to risk falling out of favor with the PE titan. (We’re talking about l’affair PHH ....)


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