By Lisa Kerner
Charlotte, N.C., May 17 - Alliance Data Systems Corp. entered into a definitive agreement to be acquired by Blackstone Capital Partners V LP, an affiliate of the Blackstone Group, for about $7.8 billion, including debt, or $81.75 cash per share.
The per-share offer price is a 30% premium over Alliance Data's closing price of $62.96 on May 16.
Alliance Data's board unanimously approved the agreement, which includes a $170 million termination fee. The transaction is slated to close by the end of the year following approvals, including Alliance Data shareholders' approval.
The company believes its outstanding series A and series B senior notes will either be tendered for or repaid in connection with the transaction.
Blackstone Group, an alternative asset management company, said the deal is not conditioned on financing and it has received equity and debt commitments for the full amount of the merger consideration.
"By maximizing the value of their investment, this agreement is clearly in the best interests of our stockholders," Alliance Data chairman and chief executive officer Mike Parks said in a company news release.
"At the same time, it is business as usual for us as we continue to support our clients and partner with them to build loyal, lasting relationships with their customers. Our clients will now have the added benefit of working with an organization that is completely focused on their success."
Banc of America Securities LLC and Lehman Brothers, Inc. advised Alliance Data and the special committee in connection with the transaction. The company was also advised by Evercore Group LLC, Kirkland & Ellis LLP and Akin Gump Strauss Hauer & Feld LLP.
Dallas-based Alliance Data provides marketing, loyalty and transaction services.
| Acquirer: | The Blackstone Group
|
| Target: | Alliance Data Systems Corp.
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| Transaction value: | $7.8 billion
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| Price per share: | $81.75
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| Announcement date: | May 17
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| Termination fee: | $170 million
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| Expected closing: | The end of 2007
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| Stock price for target: | NYSE: ADS: $62.96 on May 16
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