GreenPoint, GE Unit Seen in Bidding for United Cos
Timmons, Heather, American Banker
GreenPoint Financial Corp. and GE Capital Corp. are among a handful of potential buyers sizing up subprime lender United Companies Financial Corp., sources close to the companies said.
United Companies announced July 21 that it would have disappointing second-quarter earnings and was looking for a "strategic partner."
Since then, about 10 companies have done due diligence on Baton Rouge, La.-based United, sources said, and about half are still interested, including GreenPoint and GE Capital.
Some observers said they expect a sale within three weeks, but others were skeptical that the company would be sold.
The market is unlikely to dictate the sort of rich premium that specialty finance companies commanded earlier this year when lenders like Money Store and Beneficial Corp. were bought, analysts said.
A recent downturn in financial stocks in general, and specialty finance in particular, may mean that companies for sale like United-including Aames Financial Corp., Los Angeles, and Southern Pacific Funding Corp., Lake Oswego, Ore.-will command lower multiples than they are willing to accept.
United Companies has been trading at around $16 a share this week and was expected to sell for $20 to $30 a share.
United is the most attractive of the three companies up for sale, said Stephen G. Moyer, an analyst at NationsBanc Montgomery Securities. The company has a strong retail presence, an established servicing platform, and a good mix of loan products, he said.
But United continues to be plagued by high delinquencies in some of its portfolios, Mr. …