Tough Credit Market Forces Changes to the Home Depot Supply Deal
The lack of credit available presently almost scuttled the Home Depot Supply Deal to Bain Capital, Carlyle Group and Clayton, Dubilier & Rice. The fear of losing the deal led to a prolonged negotiating session with the Home Depot Board of Directors finally accepting 18 percent less than was initially negotiated in June.
The real sticking point was that the Banks were looking for an out. They were planning on lending Bain ect. the money and then selling that debt on the open market. When the credit market collapsed and the banks were going to have to keep the debt on their books, they started to look for any way out of the deal. Instead, a nervouse Home Depot Board decided to take 1.8 billion less to keep the deal alive and force the bankers to lend Bain the money.
Home Depot’s board yesterday agreed to sell Home Depot Supply for $8.5 billion to Bain Capital, Carlyle Group and Clayton, Dubilier & Rice, about 18% less than the price hammered out in June when the buyout boom was at its peak.
In addition, Home Depot itself will hold about 12.5% of the unit’s equity, people familiar with the matter said, and guarantee some of the debt issued by the banks to finance the acquisition. That’s significant because if the banks can’t sell the debt in bond markets, and it sits on their balance sheet, they have to mark down its value, which some can ill-afford to do. via SmartMoney.com.
I don't recommend CL in most cases...I use it for hiring, finding baby stuff, computers and bikes...anything else is a ...
Obtaining a viable news source would also be a welcome addition. Lets not pretend that rival political parties are not ...
CL is a crazy mess sometimes. I'll get response emails on a daily basis that are nothing but scammers. Get's ...
We get about 1 call every month related to a real estate scam on Craigslist. I try to visit my ...
If anyone thought this was going to go away in a few years they were just fooling themselves. It took ...
Not sure this program passes the common sense test. Isn't it true that the governments management of the housing industry ...
Well, it's March 2010 and I have not seen much of a change in the economy in Indianapolis, Indiana. Maybe ...
Coastal cities are fragile in the face of a catastrophe like this. The buildings would be destroyed in minutes. 
As a potential first-time home buyer, I have zero confidence that I would be making a smart investment in purchasing ...
Comment by Lou on 27 August 2007:
I agree with your comments.