(Adds comment from H&R Block)
By Joseph Giannone
NEW YORK, Aug 9 (Reuters) - H&R Block Inc. (HRB.N), eager to sell its money-losing Option One Mortgage unit to Cerberus Capital Management, on Thursday said it might not complete the deal until the end of December.
The largest U.S. tax-return preparation company, shares of which fell more than 3 percent, earlier had said it expected the sale to close during its third quarter, which ends on Oct. 31. Block is still working on closing the deal by then, it said in a regulatory filing on Thursday.
Block also said in the filing that its subprime mortgage unit now planned to cut more jobs this year than the 615 announced in May.
Option One is cutting costs to deal with reduced loan demand and lower prices in the secondary market.
Kansas City-based Block in the filing said Option One had announced the expanded restructuring plan on Monday.
Block, which didn’t estimate the cost of the restructuring moves, declined to say why the deal closing might be delayed. Cerberus officials did not return calls seeking comment.
The company, which bought Irvine, California-based Option One in 1997 for $190 million, says the unit generated more than $2 billion in pretax income through the end of 2007 from making loans to home buyers with weaker credit.
But the lender began bleeding money in the past year as U.S. subprime mortgage markets imploded. Housing prices slumped and loan defaults climbed.
Under pressure from shareholders, Block in April announced an agreement to sell Option One to Cerberus, a buyout fund that has snapped up other lenders, for a price that changes with the underlying value of its assets.
That value fell to $1.1 billion as of April 30, compared with Block’s earlier expectations of more than $1.3 billion. In June, Block Chief Executive Mark Ernst told analysts the deal was on track for completion by Oct. 31.
An H&R Block spokesman said the company is not disclosing a new valuation for Option One, but an update is likely to come Aug. 30, when the company reports first-quarter earnings.
Shares of Block were down 66 cents, or 3.2 percent, at $19.86 in late-afternoon New York Stock Exchange trade.