The Car and Truck Fleet and Leasing Management Magazine

Large Shareholder Objects to Proposed Sale of PHH

June 29, 2007

MT. LAUREL, NJ -- PHH Corp.'s largest shareholder reiterated its objections to the proposed sale of PHH Corp. to General Electric Co. for $1.8 billion, or $31.50 a share, according to the Philadelphia Inquirer.

Alan P. Fournier, managing member of Pennant Capital Management LLC., urged PHH's board to consider allowing PHH's mortgage business to remain in the hands of shareholders while spinning off the company's vehicle-fleet-management unit in a tax-free transaction.

Fournier, whose hedge fund manages $1.6 billion, estimated in a letter filed with the Securities and Exchange Commission that public shareholders could realize $51 to $68 a share over two or three years under continued public ownership.

Under a deal announced March 15, GE Capital Solutions agreed to pay $31.50 a share in cash for PHH and then sell PHH's mortgage operations to the Blackstone Group L.P., one of the largest private-equity firms in the world.

According to the report in the Philadelphia Inquirer, PHH's mortgage services lost $108 million last year, a sharp swing from a profit of $123 million in 2005. Its fleet-management profit climbed to $102 million from $80 million.

PHH, which was spun off by Cendant Corp. in February 2005, employed 6,160 as of April 30, including 4,740 in mortgage operations and 1,380 in fleet management.

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