Home Depot Supply Deal Falling Apart

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The FT writes that Merrill Lynch, Lehman Brothers and JPMorgan are not happy about funding a deal to buy Home Depots (HD) wholesale supply business to private equity interests. Even though the price has dropped.

The original price for the units was $10.3 billion, but HD has already admitted that the price will have to fall.

The failure of the deal could be a big blow to HD shares. The money from the sale might have been used for a share buy-back. And, the stock is already way down due to poor performance at its stores due to a contraction in home building and higher energy prices.

HD is off from over $43 in March 2006 to $34.77. If the deal comes unglued, that could get much worse.

Douglas A. McIntyre