Blackstone-Alliance Deal Could End
January 28, 2008
The Blackstone Group's $6.4 billion buyout of Alliance Data Systems appears close to being terminated because of regulatory concerns.
Alliance, a Dallas-based credit card processing and marketing services company, said Monday that Blackstone cannot close its purchase since the purchase was not approved by the Office of the Comptroller of the Currency. The company said it was informed by Blackstone that the purchase would place "operational and financial burdens on ADS, Holdco and Blackstone that cannot be reasonably assumed." And, the New York private equity firm informed the company that further negotiations with the OCC would be "futile."
A $3.3 billion market capitalized company with more than 9,000 employees spread between 60 locations around the world, Alliance agreed to be acquired in May 2007 for $81.75 per share.
Following news about the deal's possible termination, Alliance's shares plummeted 34.3% to $22.53 a share, compared with a previous day close of $65.60 per share.
The company said its board and special committee will evaluate what further steps to take on behalf of its stockholders.
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