Two recent LBOs in the US market, the $1.3 billion buyout of retail company Linens ‘n Things by Apollo Management and the $1.8 billion buyout of school supplies company School Specialty by Thomas H Lee partners and Bain Capital, have both been structured to give the sponsors a way out.
The School Specialty deal fell apart in October, partly because the sponsors inserted a rare clause in the buyout agreement that made its completion contingent on extremely favourable financing conditions.
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