The Home Depot Inc (NYSE:HD) is in the news today because it has cut the price of its construction-supply unit, HD Supply, by 18 percent to $8.5 billion. The world's largest home-improvement retailer agreed to guarantee $1 billion of the leveraged buyout. The buyers of HD Supply are Bain Capital, Carlyle Group, and Clayton Dubilier and Rice. The company dropped the price for the sale of HD Supply because the banks funding the sale had threatened to walk away from the deal due to the slump in the unit's sales. 
The lower price of the deal is also indicative of the tighter conditions that are now the norm in the credit markets. Home Depot will retain a 12.5% stake in HD Supply through the terms of the deal. The HD Supply unit has accounted for approximately 13% of Home Depot's total sales recently. The company intends to use the cash they receive from the deal to buyback shares of their stock.
Shares of Home Depot are trading higher by about 2% on this news today. Shares of Lowe's Companies Inc (NYSE:LOW) currently trade down by 1.25%. Lowe's has significantly outperformed Home Depot of late due to a better earnings outlook from the company and more efficiency in operations.
It remains to be seen whether this deal could help the overall operations of Home Depot improve. The company has had a period of severe underperformance and shareholders are certainly expecting better things from the company in the future.
Just last week GrowYourFunds profiled Lowe's as our story stock.
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