Home Depot Redoing Deal on Home Services

Dec

Home Depot Redoing Deal

posted by admin in Home Depot

The home improvement retailer Home Depot said Thursday that a deal to sell its supply unit was being renegotiated and might result in a lower price than the previously announced $10.3 billion.

The company also said it was lowering the price range for a tender offer to repurchase its stock to $37 to $42 a share, from the previous $39 to $44.

A company spokesman said the retailer would not comment beyond the news release.

The unit sale renegotiation is the latest sign that difficulties in raising debt to finance takeovers is starting to crimp transaction prices and prompting buyers to seek to amend previous agreements.

Home Depot said its stock buyback was not contingent on the unit sale. But it said in June that it planned to finance the repurchase in part with proceeds from the sale.

Giri Cherukuri, head trader at Oakbrook Investments, said the renegotiation might signal that private equity firms were not willing to pay $10.3 billion for Home Depot Supply, which distributes a wide range of building materials to contractor markets.

Home Depot, based in Atlanta, announced in June that affiliates of Bain Capital Partners, the Carlyle Group and Clayton, Dubilier %26 Rice would buy the supply unit.

Home Depot shares have dipped as much as $2 below the price it set for the planned repurchase of 250 million shares. The tender offer expires Aug. 31.