Buyout of Alliance in Jeopardy

NEW YORK – Alliance Data Systems Corp., a provider of transaction, credit and marketing services, said Monday that its $6.76 billion buyout by private equity firm Blackstone Group LP is in jeopardy.

Alliance Data shares plummeted 43 percent to $37.21 in premarket trading.

In a statement, Alliance Data said the buyer notified it after the market closed on Jan. 25 that it does not expect to win regulatory approval from the U.S. Office of the Comptroller of the Currency for the merger. It also said Blackstone was unwilling to satisfy OCC requirements for the merger.

John Ford, a Blackstone spokesman, declined to comment.

Blackstone had agreed last May to pay $81.75 per share for Dallas-based Alliance Data. If the merger falls apart, it would join a growing list of buyouts to collapse after last summer's tightening in credit markets, which made it more difficult and costly for private equity firms to obtain financing.

According to Alliance Data, Blackstone said the OCC was making demands that "represent operational and financial burdens ... that cannot be reasonably assumed," and that further talks with the regulator would be futile.

Alliance Data said it believed Blackstone has the ability to close the deal and strongly disagrees with its assertions related to the OCC. It also said Blackstone's notice did not assert any breach of the merger agreement by Alliance Data.