Reuters reported last week that Canadian equipment finance company Element Financial Corp is in exclusive talks to buy PHH Arval for about $1.35 billion.
Element has not commented, but PHH issued a statement late last week acknowledging that it is “engaged in discussions regarding a potential sale of PHH Arval,” while adding that there “can be no assurance that these discussions will result in a definitive agreement or on what terms. PHH had announced in February that it was considering selling or separating its fleet leasing business and mortgage business.
Reuter’s source said a deal with Element for PHH Arval could come within the next two weeks. But the source added that the two sides had not yet finalized the deal and some details, including customer issues, needed to be worked out.
Element, a 25-year old Canadian company that provides financing for industrial, aerospace and automotive equipment leasing, plans to use the PHH business as a platform for future acquisitions, the source said. Currently, it has total leased assets of more than $4 billion and operates across North America. It plans to more than triple its assets within several years by expanding in North America and Europe.
Many analysts have been skeptical that PHH could easily sell PHH Arval separately because of costly tax consequences of a breakup of the two companies.