CNBC Faber Report: Behind Home Depot Rumors 

Monday, 4 Dec 2006 | 1:34 PM ET

Shares of Home Depot have been trading lower after the second largest U.S. retailer reiterated that no talks have taken place involving a leveraged buyout. Deal rumors boosted share price nearly 3% on Friday. On “Squawk on the Street,” CNBC's David Faber revealed what’s going on with Home Depot .

According to Faber -- on the face of it--a leveraged buy-out seems impossible. And everyone Faber has talked with--either in management, close to management, the board of directors or on the private equity side say--it’s not going to happen.

Faber says the whole idea would be ludicrous were it not for the fact that Home Depot owns a lot of its stores - and there would be the ability to finance a lot of the debt in the real estate financing market. That’s a key distinction here.

As Faber has pointed out in the past- there’s only so much appetite in the high yield market for a huge deal. However, if you can move it to another market, then, at least you can say although it’s not likely--at least it's possible.

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  • Carl Quintanilla is an Emmy-winning reporter and co-anchor of CNBC's "Squawk on the Street," broadcast live from the NYSE.

  • Simon Hobbs co-anchors the 10 a.m. hour of CNBC's "Squawk on the Street" live from the New York Stock Exchange.

  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

  • Co-anchor of CNBC's "Squawk on the Street," David Faber also is a co-producer of CNBC's original documentaries.

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.