Harman/Levinson/Proceed/Lexicon/Revel/ Deal Busted

Makes me wonder what was the "material adverse development"? Could it have been Tweeter's demise? or, did business suddenly fall off a cliff? or, maybe they lost a big contract with an automaker?

Something "fell off a cliff" with Q4 earnings which were 25% below expectations. There is a slight delay in the launch of a new line of Mercedes (with Harman stereos going in them), but given that Hyundai, Peugeot, and others are lining up to get Harman integrated systems in their top-of-range models it should not be a real problem. And given that there is a $225mil termination fee that the would-be-buyers would have to pay to walk away, I would expect the due diligence done would have been good enough to get to the "questions of Harman's financial health" (especially given no debt and $500mil free cash flow per year and OEM mfg capacity booked out for a year-plus). It'll be interesting to see what it is...

The MAC was the inability of the buyout firms involved to obtain appropriate financing due to the recent structural changes in the credit markets.