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[Tor]

Home Depot sells supply unit Home-improvement giant also announces $22.5 billion stock buyback By Jennifer Waters, MarketWatch Last Update: 6:08 PM ET Jun 19, 2007 CHICAGO (MarketWatch) -- Home Depot Inc. said late Tuesday that it is selling its contractor-supplies business to a consortium of private-equity companies for $10.3 billion and using a big portion of the proceeds to fund a massive $22.5 billion share buyback. Home Depot shares jumped 6.4% to $40.35 in after-hours trading after the widely anticipated deal was announced. The nation's largest do-it-yourself retailer said that it will sell the $12 billion division to a group that includes Bain Capital Partners, the Carlyle Group and Clayton, Dubilier & Rice -- all of which will invest equal amounts of equity. The deal, which ends months of uncertainty about the future of the supply business under the Home Depot umbrella, should close in the third quarter, pending customary regulatory reviews. It also will pull down Atlanta-based Home Depot's earnings forecast. At the end of the first quarter, Home Depot said that it expected consolidated sales, including HD Supply, to increase by 1% to 2% this year while earnings per share would fall by 9%. Ahead of the news, analysts reporting to Thomson Financial were pegging the full-year profit at $2.58 a share, on average, compared with the year-ago income of $2.83 a share on sales of $92.68 billion, up 2%. "We're selling off a business that is producing earnings and also announcing a share repurchase program," said Chief Financial Officer Carol Tome in an interview. "When we add it all up we'll see what we end up with [for earnings per share]." The company will update investors in July. It will begin buying back shares "as soon as we've got the cash in hand," Tome added. Home Depot (HD : Home Depot, Inc News , chart , profile , more Last: 38.27+0.31+0.82% 6:13pm 06/19/2007 Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: HD38.27, +0.31, +0.8%) -- which has refocused its workforce and capital on its core retail operations -- should wind up with about $9 billion to $9.5 billion in cash from the deal, according to the finance chief. The company will fund the rest of the share repurchase through $12 billion debt issue and about $1 billion in cash on hand, she said. Half the outstanding shares The $22.5 billion program is clearly the largest in the company's history and easily dwarfs the $16.5 billion in total shares bought back since 2002, when it first began repurchasing stock. "This represents 30% of our market cap," Tome said Tuesday. "Add the two together and when we complete this we'll have bought back 50% of outstanding shares." Tome elaborated that the retailer -- the nation's second largest and the world's No. 3 player -- is still "working through the numbers" to determine what kind of profit it made off the supply division. Home Depot Supply essentially began a decade ago when the company purchased a small California-based company called Maintenance Warehouse. The business grew tremendously under former chief Bob Nardelli, mushrooming with the $3.19 billion purchase of Hughes Supply Inc. in January 2006. That deal, which also included $285 million in debt, more than doubled the size of the business. Last year, Home Depot Supply's $12 billion in revenues made it the second-largest distributor of construction, industrial and maintenance supplies in North America, behind Wolseley Supply. Shedding the unit amounts to a reversal of Nardelli's oft-criticized vision of broadening the company's focus. Nardelli's controversial reign ended in January amid a storm of shareholder complaints about his rich compensation package, his brusque management style and his curt behavior toward shareholders at its 2006 annual meeting. Earlier this year, Home Depot said that it would explore options for the business, which analysts then projected could fetch $8 billion to $13 billion. Jennifer Waters is a reporter for MarketWatch based in Chicago.

[hiker]

13,000 is the approx showing bid size at 40.20 right now that has not been filled in recent minutes 40.90 is AH high so far soon as I posted above, the 12300 of that size disappeared from the book and comes back later now at .11 have seen that bidder change price at least twice now...little itchy finger there

Edited by hiker, 19 June 2007 - 05:53 PM.