Why would he be unable to complete that deal, I wonder? He has the money because it has to be held in trust, no? It's very odd. And all these reports must weaken him substantially in the eyes of RBS/Wachovia/other sources.
I don't know what has gone wrong for Hicks with this deal, but the actual purchase price of Graham Packaging is $3.2 billion. There were plans to go public through the $3.2 billion transaction with Hicks Acquisition in partnership with the Blackstone Group and the Graham Group. That has not happened and according to reports will not. This is obviously the biggest deal Hicks has been involved in, I believe. I am posting the original article in June 2008 when the acquisition was first reported and you can see there is a great deal more money required.
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Monday, June 30, 2008
Hicks Acquisition to buy Graham Packaging in $3B dealDallas Business Journal
Hicks Acquisition Co. Inc., a special purpose acquisition company founded and headed by Tom Hicks, is buying Graham Packaging Holdings Co. and partnering with The Blackstone Group and Graham Group to take the company public in a deal worth $3.2 billion.
Dallas-based Hicks Acquisition said the deal is the largest ever between a special purpose acquisition company and an industrial company.
The combined enterprise will be renamed Graham Packaging Co. and will apply for listing on the New York Stock Exchange.
Under the agreement, stockholders of Graham Packaging will receive $350 million of cash held in trust, 35 million common shares and 2.8 million warrants. The purchase consideration includes a transfer of value to the current Graham equity holders of 2.8 million founder's shares and warrants. In exchange, the Hicks-led sponsor will retain earnout units, the shares of which have a trigger price of $13.75 and the warrants of which will become exercisable at a strike price of $10 and a trigger price of $15.
After the transaction is completed, Hicks and Hicks Acquisition's (Amex: TOH) stockholders will own 66 percent of Graham's common shares. Current Graham equity holders, led by Blackstone, will remain the company's largest shareholder, with 34 percent of the common shares outstanding. Blackstone (NYSE: BX) has agreed to maintain the largest ownership stake for at least two years and guide the company strategically and operationally.
The existing management, including Chairman and Chief Executive Warren Knowlton and Chief Operating Officer and Chief Financial Officer Mark Burgess, will continue to lead the company.
Founded in 1972, York, Penn.-based Graham Packaging makes plastic containers used for juice drinks, sports drinks, drinkable yogurt and smoothies, nutritional supplements, wide-mouth food, condiments, beer, liquid laundry detergent and motor oil. The company had sales of $2.5 billion in 2007 and operates 83 manufacturing plants in North America, Europe and South America.
"With the support of our new ownership group and our strong free cash flow from operations, we will continue to invest in and grow our business, pay down debt, accelerate our earnings growth, and meet the needs and expectations of our employees, customers, suppliers and stockholders," Knowlton said in a statement.
"After considering more than a hundred possible transactions, we're tremendously pleased to have identified Graham Packaging as the right transaction for Hicks Acquisition, and to be partnering with Blackstone, whose senior partners I have had close business relationships with for many years, and the other Current Graham Equity Holders," Hicks said.
The deal is expected to close later this year, subject to clearing antitrust regulations and Hicks Acquisition stockholder approval.
Hicks Acquisition was launched in October 2007 in an initial public offering that was at the time, at $552 million of gross proceeds, the largest special purpose acquisition company IPO. It was founded by Hicks for the purpose of acquiring, or acquiring control of, businesses or assets.
http://dallas.bizjournals.com/dallas/stories/2008/06/30/daily2.html