New Jersey-based PHH announced a $1.8 billion deal in March to sell the company to GE Capital Solutions. As part of the deal, GE agreed to sell PHH's mortgage company, which has a major operations center in Jacksonville, to buyout firm The Blackstone Group.
But last week, PHH announced that Blackstone is having problems getting financing for its part of the deal. Blackstone received a letter from its lending group indicating that its funding plan might fall $750 million short of what Blackstone needs to buy the mortgage company.
Blackstone also told PHH it is "not optimistic" about finding alternative financing, PHH said.
PHH said it is moving ahead with the buyout plans and will hold its shareholders meeting to vote on it Wednesday, as scheduled. But since the sale of the mortgage unit to Blackstone is a condition of the buyout agreement with GE, the status of the whole deal is up in the air.
Wall Street was already nervous about the deal before the Sept. 17 announcement. GE agreed to buy PHH for $31.50 a share, but PHH's stock was trading only at $28.50 before the latest news. It dropped $4.26 to $24.24 after the announcement.
INVESTMENT LOOKING GOOD: PSS World Medical Inc.'s investment in athenahealth Inc. is looking pretty good after athenahealth's initial public offering last week.
Jacksonville-based PSS made a $22.5 million investment in athenahealth in July, equal to $13.50 per share.
The Massachusetts-based company, which provides Internet-based billing and insurance processing services for physicians, went public last week at $18 a share. And on its first day of trading Thursday, it nearly doubled in price, to $35.50.
That means the value of PSS' 1.47 million shares of athenahealth, representing 4.6 percent of the company, jumped to $52.2 million.
LAND SALE HELPS RAYONIER: Rayonier Inc. said last week that a land sale closed this month will result in higher-than-expected third-quarter earnings.
Jacksonville-based Rayonier said the sale of 3,100 acres of rural property in West Central Florida will add about $43 million in after- tax earnings, or 54 cents a share. The company now expects third-quarter earnings to be between 83 cents and 88 cents a share.
The consensus forecast of analysts surveyed by Thomson Financial had been projecting earnings of 49 cents a share.
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