The Car and Truck Fleet and Leasing Management Magazine

Investor Continues to Oppose Sale of PHH

August 14, 2007

CHATHAM, NJ – The largest shareholder of PHH Corp. continued to push for a spin-off of the company’s fleet services business from its mortgage business, rather than a sale to General Electric Co., in a letter to the board on Friday, according to the Web site, The managing member of investment adviser Pennant Capital Management LLC demanded the company present shareholders with an analysis of the benefits of continued public ownership, as compared with the proposed $1.8 billion sale.

Under the terms of the all-cash deal, which was announced in March, GE Capital Solutions will pay $31.50 per share for PHH, giving its stockholders a 13 percent premium over the shares’ closing price before the announcement. GE will then sell PHH’s mortgage operations to an affiliate of private equity firm Blackstone Group LP.

PHH’s stock price has plunged nearly 20 percent since reaching a 52-week high of $31.52 on July 2, as the mortgage financing industry has reeled from the breakdown of subprime mortgage lending to borrowers with weak credit histories.

The company will be valued at about $60 per share in two years if the proposed sale is prevented.

Pennant owns 5 million PHH shares, representing a 9.4 percent stake in the company. The acquisition is expected to close in the current quarter, pending shareholder and regulatory approvals. PHH shareholders are scheduled to vote on the deal on Sept. 26.

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