Nortek Bondholders Grumble at Kelso Deal

Nortek Inc. shareholders last week enjoyed a tighter spread on the company’s $1.6 billion takeout by Kelso & Co. Another constituency of Nortek security holders, however, remained decidedly unhappy about the pending transaction-the owners of the company’s four tranches of high yield debt, totaling $945 million. Last Tuesday, the stock of Nortek, a residential and commercial building products manufacturer, rose as much as 62 cents per share from its opening price, taking it to $43.97, $2.03 south of its $46-a-share value in the cash deal. On that day, Kelso was already moving on to another planned takeout-of BWAY Corp. But the renewed surety about the Nortek transaction was arguably unrelated and perhaps only a function of the market’s banner day-the Dow closed up 346 points.