Option One Sold!

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Finally! My neighbor can sleep at night. She has been stressed for months as the gossip whipped around Option One’s Irvine, California offices as to who the new bidder was and when and if and for how much the unit would be sold for.

It was finally announced today that H&R Block has sold Option One to Cerberus Capital Management LP. Cerberus is a hedge fund manager based out of New York for about $800 million. This is approximately 40% less than H&R was asking for the company when it began trying to sell it. H&R was seeking $1.3 billion for the unit up until last month reports Bloomberg.

“What matters most is that it’s being sold,” said Scott Schneeberger, an analyst at CIBC World Markets Inc. in New York who has a “sector perform” rating on the stock. “The price isn’t clear and might change more, but it looks like they’re getting something for it. Just to make it go away is what investors really want the company to do at this point.”

H&R Block is exiting mortgages altogether with the sale and the upcoming closing of H&R Block Mortgage, it’s prime mortgage division.

The sale will exclude the H&R Block Mortgage subsidiary of Option One. H&R Block Mortgage, which makes prime mortgages, will close before the sale transaction concludes, H&R Block said.

The final price of the deal is still up in the air pending final write downs of subprime loans (which could be in excess of $300 million) and performance incentives worth up to $300 million that are tied to the deal.