KKR, Goldman Sachs pull out of $8B buyout of Harman International

[mahatmakanejeeves]

More financial news, this from last week.

Squeezing The Harman

Market Scan
Squeezing The Harman
Carl Gutierrez, 09.24.07, 3:40 PM ET

Just when you thought things were bad for Harman International, on Monday they got even worse.

Shares of the audio equipment maker fell 5.2%, or $4.42, to $80.58 in early-afternoon trading after Standard & Poor’s revised its outlook on the company's bonds on Friday to "developing" from “negative.” The reason? On Friday, Harman added drama to Wall Street's close when it revealed just before the bell that its would-be buyers, KKR (nyse: KKR) and Goldman Sachs (nyse: GS), wanted out of their $8 billion takeover deal (See "Harman Bidders Want Out").
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Although shares of the Washington, D.C.-based company lost 20.9% of their value by the end of Friday, they began plummeting prior to trading after the Wall Street Journal reported earlier that the investors may try to renegotiate the price or back out of the deal (See "KKR and Goldman Dump Harman").

Harman was also hurt Monday after it announced it expects first-quarter earnings of 50 cents per share, well below analyst estimates of $1.02 per share. The company said its results were affected by higher research and development costs.

OK, I know what you're thinking: "so what?" "So what" is that the Harman in Harman International is Sidney Harman, Deputy Secretary of Commerce of the United States in 1977 and 1978 under Jimmy Carter. Harman International is the old harmon/kardon, the hi-fi company that goes way back to the fifties.