FRANCE - Management demands stricter debt terms on OGF deal

Though unusual, the move is not surprising given the state of the leverage markets. Lenders on the £11.1bn UK chemist Boots deal, backed by KKR, were reported on Friday to have delayed the sale of £1bn of second lien. Already the lenders had postponed selling the £5bn senior layer, owing to reduced appetite from CDOs and hedge funds.

The EUR 500m debt package on OGF, which corresponds to roughly 8x EBITDA, comprised a B-tranche, second-lien and mezzanine facilities. Crédit Suisse acted as sell-side M&A adviser and provided the leverage for this latest buyout. Vestar acquired a 65% stake in March 2004 in a EUR 300m deal. Lehman Brothers, the lenders on that deal, later arranged a EUR 287m recapitalisation in June 2005. OGF generated revenues in excess of EUR 500m in 2006, and employs 5,800 staff.

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