Banks Might Derail Home Depot Deal

Private equity threatens lawsuit as financing dries up

By Jason Farago, Newser Staff

Posted Aug 24, 2007 7:10 AM CDT

(Newser) – The pending sale of part of Home Depot took an ugly turn last night as three banks and three private equity firms entered into a showdown over financing. Home Depot dropped its asking price by over $1 billion, but the banks involved—JPMorgan Chase, Lehman Brothers and Merrill Lynch—have threatened to withdraw from a deal that may become the first casualty of the credit crunch.

In years past banks have happily funded-private equity buyouts at handsome terms, but the current crisis has left them with a $300-billion backlog in deals to be funded. Even after Home Depot's price drop the banks remain reluctant, and Bain Capital, Carlyle Group and CD&R, the three private equity firms at the table, have threatened a lawsuit.

Adventures at Home Depot ((c) billypalooza)

Home Depot Logo ((c) Neubie)

The Home Depot store is shown in this Aug. 13, 2007 file photo in North Miami, Fla. (AP Photo/Wilfredo Lee, file) (Associated Press)

Home Depot Logo ((c) Neubie)

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Banks Might Derail Home Depot Deal

Private equity threatens lawsuit as financing dries up

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Banks Might Derail Home Depot Deal

Private equity threatens lawsuit as financing dries up

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OTHER STORIES ON OUR RADAR

private equity • Carlyle Group • Bain Capital • Merrill Lynch • Lehman Brothers • Home Depot • buyout • credit crisis • JPMorgan Chase

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Home Depot Deal Renovated

Price for wholesale unit slashed

Romney's Bain Had Loads of Profit, Bankruptcies

Wall Street Journal says Romney's firm didn't always turn things around

Credit Crisis Spells Disaster for Private Equity Firms

Debt tightens as profits fall for many acquired companies

Crisis Leaves Goldman Nearly Unruffled

Being ahead of curve, having friends in high places pays dividends

Lehman's Asset Management Arm Sold on Cheap for $2B

Prestigious Neuberger Berman goes to 2 private equity firms

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Newser By Users

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What is Newser?