August 22, 2007

The Financial Times has reported that the buyers of HD Supply want a more than $1 billion price cut to the agreed-upon $10.3 billion purchase price. The parties recently moved the closing date for the sale by Home Depot&nbsp ; back to Thursday, Aug. 23 -tomorrow.
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The paper reported that one market investor expects the new price could be closer to $8.5 billion, a sentiment echoed earlier this month by industry analysts.
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At the original price of $10.3 billion, the buyers would have paid 10X-12X EBITDA. Tightening credit markets forced the deal-makers back to the table.
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The buyers would have to pay a $310 million break-up fee if they decide to walk away from the deal, FT said.
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