MT. LAUREL, N.J. – Hedge fund Pennant Capital Management has wratcheted-up its proxy contest for seats on the board of mortgage bank PHH Corp., with two candidates it hopes will unseat both the company’s chairman and its CEO.
The dissident candidates are Gregory Parseghian, former chief investment officer and briefly, CEO of Freddie Mac, and Allan Loren, former chairman and CEO of Dun & Broadstreet. The two would replace PHH’s Chairman A.B. Krongard and CEO Terence Edwards, whose director terms expire at the June 10 shareholders meeting.
Pennant, which is the company’s largest shareholder with a 10% stake in PHH, said its candidates will help reinvigorate the company, which has been weighed down by the travails of the mortgage market. PHH reported net income of just $2 million for the first quarter, down from $30 million for the first quarter last year, and a loss of $254 million for 2008.
A deal to sell PHH, the largest mortgage bank for credit unions, for $31.50 per share fell apart in 2007 because of financing difficulties. The company's shares traded for around $17 yesterday. Pennant said it believes the shares have value of $40 each.
