Buyout Offer for WestPoint Stevens Canceled

WestPoint Stevens Inc. said a proposed buyout offer by a group led by Chairman and Chief Executive Holcombe Green Jr. was canceled because of higher-than-expected financing costs. Green had offered $22 a share, or about $800.4 million, in the leveraged buyout. The maker of Martex, Utica and Lady Pepperell linens had said in November it hired Merrill Lynch & Co. for advice on a buyout or merger. The stock, which last traded at $18 before trading was halted, has lost almost half its value in the last year. Green said the buyout offer was ended because recent increases in the cost of financing led to the withdrawal of a major investor. The company’s decision comes three days after the Federal Reserve raised the overnight bank-lending rate by half a point to 6.5%, the highest in nine years. WestPoint Stevens had raised the price of its proposed management buyout to $22 a share from $21 in March.