Moody's To Review GenTek's Ratings
NEW YORK (AP) ¿ Moody's Investors Service on Monday placed the ratings of GenTek Inc. on review for possible downgrade after the maker of chemical products and engine components said it had agreed to be bought by a subsidiary of private-equity firm American Securities LLC.
Parsippany, N.J.-based GenTek said shareholders will receive $38 per share. That represents a 41 percent premium over GenTek's closing price of $27 on Friday, the last trading day before the agreement was signed.
The companies said the transaction was valued at $673 million, which includes $411 million in equity value and $262 million in debt and other liabilities.
Moody's said the review covers about $212 million of long-term debt. The review includes the company's family rating of "B1," its probability of default rating of "B1" and senior secured bank credit facility of "Ba3." Moody's changed the outlook for the company to under review from stable.Moody's said it believes the deal would activate a change in GenTek's credit facilities that may trigger a possible refinancing. GenTek shares jumped $10.76, or 40 percent, to close Monday at $37.76 on the acquisition announcement.
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