Home Depot is forced to drop the price of its wholesale supply unit by $2 billion.
The world’s largest home improvement store has been hit hard by global credit fears which have forced down the sale of its wholesale supply unit by $2 billion.
HD Supply had originally been put up for sale for $10.3 billion but after talks last week Home Depot was forced to accept $8.5 billion. It also agreed to finance$1 billion of debt and retain 12.5 per cent the unit’s equity.
The deal was initiated in April in buoyant market conditions but the buyout consortium Bain Capital, Carlyle Group and Clayton Dubilier & Rice said that the current state of theUShousing market had significantly changed the supply unit’s worth.
As speculation about a lower sale price circulated Home Depot’s share price dropped 2.2 per cent to $34.