HD the target of an LBO?

[riverfrontbrewer]

http://milwaukee.bizjournals.com/milwaukee/stories/2010/03/15/daily18.html


Quite interesting to me, being an avid rider....most LBO's end up with a wholesale liquidation of many assets of the company.

A good movie on this (and the same firm, KKR) is called Barbarians at the Gate, about a takeover of Kraft Foods in the mid 80's or so.

 

[Hophazard]

While LBOs can result in liquidations/spinoffs, I think what's more likely here (and with most major brands that are targeted by PE shops) is you're going to see them end up levering up and then reselling to another PE shop once they can cut costs (and product quality) and boost earnings. This is essentially what happened to the mattress industry. I believe KKR still owns the majority of Sealy (unless they've already sold it). Hopefully doesn't happen at HD though this isn't the first time I've heard a rumor about them...