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ADS Climbs After Dropping Blackstone Suit

The company says the firm is working to complete the buyout, but the deal still may fall through.

Alliance Data Systems (ADS) - Get Alliance Data Systems Corporation Report gained nearly 7% Friday after the credit card services provider dropped its lawsuit against Blackstone Group (BX) - Get Blackstone Group Inc. Class A Report, noting that the private-equity firm is working to complete its buyout of the company.

ADS shares were pummeled late last month after the company sued Blackstone based on concerns that it may not close the acquisition.

The deal worries came after the Office of the Comptroller of the Currency wanted Blackstone to put up more capital for the purchase. Blackstone balked at those conditions.

In the press release Friday, ADS said, "Alliance Data has identified various potential solutions to OCC-related issues that Blackstone has said are impediments to completing the merger, and the Company looks forward to working together with Blackstone to effect an acceptable solution to these issues. There can be no assurance, however, that an acceptable solution will be obtained or that the merger will be completed."

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The company also said that since the filing of the lawsuit, Blackstone has said it is committed to the closing of the deal, including working with ADS on proposals directed to resolving regulatory issues.

Shares of ADS rose $3.56 to $55.02 Friday. While the stock has climbed sharply since falling below $40 the day the lawsuit was filed, it's still well below the $81.75-a-share buyout price Blackstone agreed to in May.