The wild speculation about a Home Depot (HD) private equity buy-out has been bounding around for weeks.
Well, an SEC filing may finally put a dagger in the heart of the rumors. Home Depot has filed a shelf regiatration for $5 billion in notes. The purpose of the funds would be to buy back HD stock.
Although the idea has been hair brained since it was floated, the media would not let it go. With operating income of about $8 billion and cash flow from operations of less than $6.5 billion, a $100 million price can’t be supported.
If you are going private, why borrow to buy back the stock.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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