H & R; Block Inc. has agreed to sell its Irvine-based Option One Mortgage Corp. unit to private equity firm Cerberus Capital Management LP, the Kansas City-based tax preparer said Friday.
A definitive purchase price for Option One, the company’s beleaguered subprime lending unit, is unclear.
But it won’t be as much as the $1.3 billion H & R; Block was aiming for when it said it would put Option One up for sale late last year.
H & R; Block said the cash purchase price will be the value of the tangible net assets of Option One at the date of the deal’s closing, minus $300 million.
The sale is expected to close by the end of October.
As of Jan. 31, the net assets of Option One were $1.27 billion, but because of changing market conditions in the subprime industry the price will be different at the time the deal closes, H & R; Block said.
Analysts predict New York-based Cerberus will pay a maximum of $800 million for the Irvine-based company, which makes loans to borrowers with less than perfect credit.
H & R; Block will also have the option of selling some other Option One assets before the deal closes, the company said.
Cerberus is known as distressed asset buyer and one of the larger buyout firms in the country.
