NEW YORK (AP) - Investment brokerage Bear Stearns Cos. said Tuesday it plans to buy parts of ECC Capital's subprime wholesale mortgage banking division for $26 million in cash and assumption of some lease liabilities.
Under the agreement, Bear Stearn's residential mortgage subsidiary will acquire ECC Capital's subsidiary Encore Credit, which originates and invests in residential mortgage loans.
The deal is expected to close by the end of 2006, according to ECC Capital, which said it will pay stockholders 80 cents per share within thirty days of the close.
As part of the deal, Bear Stearns will take over Encore Credit's facilities in California, Illinois and Virginia. Bear Stearns said it expects to employ most of Encore's current personnel.
Shares of Bear Stearns fell 75 cents to $148.30 in after-hours trading, while ECC Capital Corp. rose 21 cents after hours to $1.25.