A bidding war over GE Capital Mortgage Services appears to be shaping up that would pit Citicorp against Chase Manhattan Corp., and possibly some other major lenders.
Sources close to Citicorp said Thursday that the company had retained Salomon Smith Barney for a possible bid. Other investment banking sources said Chase Manhattan Mortgage has also expressed an interest in the unit, which boasts a $100 billion mortgage servicing portfolio and a network of brokers and correspondents. The GE Capital Corp. unit, which had denied it was for sale earlier in the week, said Thursday it had "no comment." Talk of the sale first came to light in an American Banker report Tuesday, on a rumor that Citicorp was conducting due diligence. A source familiar with GE said it has neither circulated bid packages nor hired an investment banker but that it is prepared to retain Goldman, Sachs & Co. if adequate bids appear to be in the offing. Spokeswomen for Citicorp and Chase declined to comment, and officials from Salomon Smith Barney and Goldman did not return calls. If Citicorp were to buy GE Capital Mortgage, it would leapfrog into the top five servicers. If Chase bought the unit, it would become the largest servicer of mortgages and have a portfolio of nearly $270 billion.