Another LBO deal bites the dust

From the Wall Street Journal:

Cerberus Drops Bid for ACS Amid Credit Crunch

Cerberus Capital Management officially withdrew its $6.2 billion offer for Affiliated Computer Services Inc. yesterday, amid shareholder irritation over how the company's directors handled the $62-per-share approach, according to people familiar with the matter.

The ACS situation underscores the often-fraught position of corporate boards, who must push to get the highest price for company shares, all the while ensuring that they don't lose the interest of prospective buyers. With the recent downturn in the credit markets, sellers have lost some of their leverage, leaving some deals in the lurch.

In a letter to a special board committee of ACS, Cerberus officials said, "We regret that we must withdraw our offer to acquire the company due to the continuation of poor conditions in the debt markets."

We've been hearing in the last month or so that conditions in the credit markets are improving. Clearly they can't be that good as LBO firms are still having trouble raising debt for buyouts.