This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Duane Reade Lowers Buyout Price

Duane Reade (DRD - Get Report) amended its $17-a-share buyout agreement with subsidiaries of Oak Hill Capital Partners to reflect a price of $16.50 a share and extended the termination date for the merger until Aug. 18.

Oak Hill Capital had indicated on June 12 that it was not prepared to extend the equity commitment to take New York-based Duane Reade private unless there was a reduction in the per-share purchase price by $1.

Meanwhile, as part of the revised terms of the transaction, Duane Reade and its financial adviser, Bear Stearns, are allowed to seek competing proposals.

Shares of Duane Reade were bid higher in Monday morning trading, lately up 85 cents, or 5.5%, at $16.28 on the New York Stock Exchange.

The merger agreement was also amended to modify and/or eliminate certain closing conditions to make the merger more likely.

In addition, Oak Hill Capital provided a renewed equity financing commitment, and the debt financing sources also provided a new commitment, Duane Reade said.

Just last week, Duane Reade had extended the deadline of the merger agreement to July 13 from June 30. Bear Stearns had received a letter on June 12 from the two subsidiaries of Oak Hill Capital, Duane Reade Shareholders LLC and Duane Reade Acquisition Corp., which said Oak Hill Capital was unwilling to waive the termination of the equity commitment letter without a $1 reduction in the merger amount, Duane Reade said.

The letter cited a charge against Duane Reade's earnings of $12.6 million from last year and related ongoing additional annual expenses of $4.4 million. The $12.6 million charge, which was announced March 11, represents an estimate of the contributions not paid to various union benefit funds. As a result of the charge, Duane Reade had restated its fourth-quarter and full-year 2003 earnings.

Duane Reade and Oak Hill Capital are currently in discussions concerning the terms of the merger, which, when announced in December 2003, represented about $415 million in cash.

A Duane Reade shareholder meeting will take place July 26.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
DRD $1.78 2.89%
YHOO $44.13 -0.69%
AAPL $124.25 -0.14%
FB $81.66 -0.67%
GOOG $542.56 -0.99%

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs