Alliance Data (ADS) Deal Falls Apart

Investing

Published: January 28, 2008 7:54 am

Shares of Alliance Data (ADS) are trading off 42% before the open. The Blackstone Group (BX) and Aladdin Solutions have informed Alliance Data that they do not anticipate the condition to closing the merger relating to obtaining approvals from the Office of the Comptroller of the Currency (OCC) will be satisfied.

ADS looks ready to put up a fight. It said it "strongly disagrees with Blackstone’s stated assertions that (i) the OCC’s most recent written proposal to Blackstone’s counsel embodied the OCC’s "final position" with respect to the terms on which the required approvals would be granted and (ii) the OCC is "demanding that extraordinary measures be taken by ADS and various Blackstone entities in connection with the Change in Control Notice" that "represent operational and financial burdens on ADS, Blackstone and it affiliates that cannot be reasonably assumed." Moreover, the Company believes that Blackstone has the ability to cause the condition to closing cited in Blackstone’s letter to be satisfied.

According to the company, Blackstone’s notice did not assert any breach of the merger agreement by Alliance Data or the occurrence or anticipated occurrence of any material adverse effect.

It looks like a nice, big lawsuit.

Douglas A. McIntyre

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