The merger agreement provided that a wholly-owned subsidiary of General Electric Capital Corporation (GECC) would merge with and into the company and that immediately following the closing of the Merger GECC would sell the company’s mortgage business to Pearl Mortgage Acquisition 2, an affiliate of The Blackstone Group or the Mortgage Business Sale.
It was a condition to closing of the merger that Pearl acquisition is ready, willing and able to consummate the Mortgage Business Sale. The company has been informed that Pearl acquisition was not able to obtain the requisite debt financing. Pursuant to the terms of the merger agreement, the company has requested payment of $50 million from an affiliate of The Blackstone Group as a termination fee.
Krongard, non-executive chairman of the board of the company, said: I am disappointed that we could not conclude the transactions contemplated by the merger agreement. 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.
