Five-year credit default swaps for Affiliated Computer Services widened 76 points to 272 last Tuesday on news it received a buyout proposal from Darwin Deason, founder and chairman, and Cerberus Capital for $8.2 billion. The company's 4.7% '10 notes and 5.2% '15 notes stayed relatively flat on the news. Its term loan "B" was trading slightly lower than last week at 100.643-101.089, according to Markit data.
Citigroup has committed to financing the buyout, which offers shareholders $59.25 per share. The acquisition would include the assumption of about $2.1 billion in bank debt and $500 million of publicly traded bonds, according to a KDP Advisor report. Shareholders brought two lawsuits against the company on Wednesday claiming it did not adequately consider other bidders and the buyout does not represent the best value for shareholders.
The company tapped Citi for a $1 billion revolver and an $800 million term loan in April (CIN, 4/3) and again in June for a $1 billion add-on term loan (7/7). The revolver and add-on are priced at LIBOR plus 2% while the term loan is priced at LIBOR plus 1 1/2%.
Dallas-based Affiliated provides business process outsourcing and information technology solutions to commercial and government clients. Calls to a company spokesman were not returned.