Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, August 27, 2007

Home Depot Announced Renegotiated Terms of Sale of Unit

In a deal that has been closely watched as a bellwether of the times, Home Depot announced that it had renegotiated the price to sell its wholesale supply unit at $8.5 billion, down nearly $2 billion from the original price, after tough negotiations with the banks and private equity firms, who insisted on new terms because of the credit squeeze.  The private equity firms agreed to supply more equity, and  Home Depot also agreed to hold about 12.5% of the unit's equity and guarantee some of the debt issued by banks to finance the deal.   WSJ, Home Depot Hit As Credit Crunch Squeezes Deals; NYTimes, Home Depot Unit Sees Price Plunge in a Tight Market.

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