Blackstone Group Inc. boosted its offer to buy its own portfolio company Stearns Lending Inc. out of bankruptcy under a settlement with the mortgage lender’s top creditor, WSJ Pro Bankruptcy reported. The private-equity firm on Wednesday raised its bid to $65 million from $60 million to secure a deal with Pacific Investment Management Co., which agreed to support a reorganization plan that would keep Stearns under Blackstone’s control despite the bankruptcy. Under the proposal, Blackstone would increase its stake in Stearns to 100 percent from 70 percent in return for the capital contribution. The money is earmarked to cash out $183 million in bonds, roughly two-thirds of which are held by Pimco. At various points, Pimco has questioned Blackstone’s attempted takeover of Stearns, saying the mortgage lender wasn’t making a fulsome effort to put the private-equity firm’s offer to the test. The nation’s 20th-largest mortgage lender, Stearns filed for bankruptcy in July after hitting an impasse with Pimco during debt-restructuring negotiations. Blackstone made a $60 million offer for full ownership of the company, an unusual outcome in chapter 11 proceedings in which owners are typically wiped out when creditors aren’t paid in full.
