PHH worth its buyout price, analyst says
Reuters quotes Barron's quoting analyst Ben Silver.
NEW YORK, Sept 23 (Reuters) - Mortgage and vehicle fleet company PHH Corp (PHH.N: Quote, Profile, Research) should be a good buy if its troubled buyout goes through, after its shares slid amid concerns about financing, Barron's said in its Sept. 24 edition.Last week PHH, which agreed in March to be acquired by General Electric Co (GE.N: Quote, Profile, Research) and Blackstone Group LP (BX.N: Quote, Profile, Research) for $1.8 billion, said its takeover could collapse because Blackstone faces a shortfall of up to $750 million in debt financing.
PHH's leasing business is worth about $20 per PHH share, or 14 to 15 times estimated 2007 cash earnings, and the mortgage business has a tangible book value about $19 a share, Ben Silver, a portfolio manager at Pzena Investment Management, told Barron's.
Silver told Barron's PHH is worth at least the buyout price. PHH shareholders are due to receive a total of $31.50 a share, according to the financial newspaper.
Shares of PHH closed on Friday at $24.39, down 2.6 percent, on the New York Stock Exchange.
