SAF Wednesday E-Brief - 12/13/2006 (Plain Text Version)
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Home Depot CEO Denies Buy-out Rumor
Home Depot representatives are denying rumors that the company is about to be bought out by two private equity groups, according to a recent story in the Atlanta Journal-Constitution. "It's simply not true" Home Depot CEO Robert Nardelli was quoted in the newspaper as saying at a meeting in Atlanta, adding that, "On any given day, we are running the numbers on lots of other companies. Somebody is probably running numbers on us, too." Reports have been circulating recently that Kohlberg Kravis Roberts & Company (KKR) and Texas Pacific Group Ventures are exploring a $100 billion leveraged buy-out of Home Depot, whose common stock rose nearly 4 percent on Friday. The Financial Times reported that these speculations have been circulating for weeks following a slump in Home Depot's shares, due to a slowdown in the U.S. housing market. Private equity firms such as KKR and Texas Pacific buy and sell companies, paying with a small amount of their cash and borrowing the rest. Large buyout firms, with funds of $10 billion or more, often crunch numbers on large companies to see if they are viable buy-out candidates. Should the buy-out take place, it would be more than twice the size of the largest private equity deal in history, last month's $36 billion takeover of Equity Office Properties by Blackstone. Media representatives of KKR and Texas Pacific declined to comment. The Home Depot, the world's largest home improvement retailer, has 2,104 retail stores throughout the U.S., Canada, and Mexico. --Vanessa Machir
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