Is Home Depot Giving Away the Store?
The really important question about the sale of Home Depot's construction supply business isn't the price, which Home Depot lowered 18% on Aug. 28, to $8.5 billion, after round-the-clock negotiations. The real issue is whether the unit should be sold at all. Some upset investors argue that by selling HD Supply, which serves contractors rather than do-it-yourselfers, Home Depot's new management is dumping its best hope for future growth simply to finance a stock buyback and exorcise the ghost of ex-Chief Executive Robert Nardelli, who masterminded the purchase. They say Home Depot (HD) is giving away a prize to a bunch of smart buyout firms that will extract huge profits from it over the long term.
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