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Home Depot Talks On Wholesale Unit Get Hostile

Posted by ecoshift on August 24, 2007

Home Depot Talks On Unit Get Hostile

Equity Groups Work
To Set Deal; Banks
Challenge Terms

By DENNIS K. BERMAN and HENNY SENDER
August 24, 2007; Page A10

Home Depot Inc. last night was close to accepting about $1.2 billion less for its wholesale distribution business in the sale to three private-equity firms, people familiar with the matter said.

But there were still substantial doubts about whether the deal would close before a deadline yesterday night, as three major banks continued to balk over the financing.

The situation was becoming increasingly ugly, people familiar with the matter said, with some of the most senior figures on Wall Street trying to manage their exposure to a deal beset by twin crises in both the housing and credit markets. The banks — J.P. Morgan Chase & Co., Lehman Brothers Holdings Inc. and Merrill Lynch & Co. — were last night preparing for the possibility of lawsuits from the private-equity firms over the matter, those people said.

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