What a week. Dickering over Sallie Mae and the canceled Acxiom buyout confirmed that not just small LBOs are imperiled, while Citi showed just how much pain leveraged loans have caused the banks.
But spreads narrowed on some of the bigger, closely watched LBOs like TXU, meaning shareholders are all but certain they will close – especially after First Data led the way.
For others though, arb traders are on the fence. They’re eyeing several pending buyouts, such as Penn National, with double-digit caution. Now that a few private equity firms have walked out on buyouts, the path is that much more open for others.
(Photo: Sam Zell, Reuters file)
| Target | Buyer | Spread (Current) |
| TXU | KKR | 0.6% |
| Hilton Hotels | Blackstone | 1.5% |
| ALLTEL | TGG; GS | 2.0% |
| Harrah’s | Apollo; TPG | 3.1% |
| Clear Channel | Bain; T H Lee | 5.6% |
| Cablevision | Management | 5.9% |
| Penn National | Fortress | 12.7% |
| Reddy Ice | GSO Capital | 15.7% |
| Tribune | Sam Zell | 20.2% |
| SLM Corp. | JC Flowers; BofA | 20.3% |
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