What's taking Prudential so long to sort out the bids for its mortgage businesses?
Observers were pondering this question last week as negotiations continued and a source close to the deal said an announcement of the winning bidder or bidders was still weeks away.
No bid for any part of Prudential has been accepted yet and additional bids are still welcome, the source said.
Some in the market speculated that the deal was taking so long because Prudential had not received what it regards as an acceptable bid. But sources close to the situation disagreed, saying the delay was attributable to the complexity of assembling a deal for so large and diverse a company.
Prudential and its investment bankers at Goldman, Sachs & Co. have not yet decided whether Prudential Home Mortgage, the mortgage company component of the wide-reaching Residential Services Corporation of America, Clayton, Mo., will be broken up and sold in pieces, according to the source.
About 95% of the value of the entire corporation is in Pru Home, the source said. But Residential Information Services and Lender's Services Inc. are likely to be sold separately from Pru Home. Bids for all of Residential Services are still being looked at to determine if they offer the best price.
Interested parties have placed bids on the entire company and on each of the units, plus pieces of Pru Home Mortgage.
Bidders for all or some of the package are GE Capital Mortgage Services, Bank of Boston in a joint venture with Thomas Lee & Co. - a venture capital group in Boston - and other investors, Norwest, Countrywide, PHH US Mortgage, Mortgage Guaranty Insurance Corp., and Chicago Title and Trust Co.
Even at this late date, a new name emerged as a possible bidder: Bank United of Texas. While the report could not be confirmed, a role for the thrift would not be a surprise as it has been in the acquisition market recently and has a large servicing operation for jumbo adjustable-rate mortgages.
While MGIC has provides a number of mortgage-related services, it is not a lender or servicer, and it has been said they are interested in Lender's Services. And PHH, a prominent affinity lender, has said it is interested in Pru Home's origination capabilities.
For Countrywide and Norwest, the $75 billion servicing portfolio, or some portion of it, could be the prize.
Prudential had no comment on the deal.
