(Bloomberg) -- A group of banks led by Wells Fargo & Co. launched a $1.6 billion delayed-draw term loan to help fund Tempur Sealy International Inc.’s acquisition of Mattress Firm Group Inc., according to a person familiar with the matter, as the Federal Trade Commission is moving to block the deal.
A lender call will be held Monday, Sept. 23 at 2 p.m. New York time, the person said, asking not to be named because the information is private. Commitments are due Thursday, Oct. 3 at 5 p.m., and price talk has yet to be announced, they added.
Representatives for Tempur Sealy, Wells Fargo and Mattress Firm did not immediately respond to a request for comment.
The FTC sued in July to block the acquisition, valued at $4 billion. Tempur Sealy “will have the ability and incentive to suppress competition and raise prices for mattresses for millions of consumers” if it acquires Mattress Firm, the agency alleged in its complaint.
The debt deal would mark the largest delayed-draw term loan since 2021, according to data compiled by Bloomberg, when federal contractor Peraton Corp. sold an almost $3.8 billion term loan. With a delayed-draw feature, a borrower has access to a loan’s full amount when the deal closes, but can choose to borrow the money at a later date.
Other companies have tapped the debt markets for money while deals await regulatory approval or appeals. Last month, grocery chain Kroger Co. sold $10.5 billion of notes to fund its acquisition of Albertsons Cos., which has also been a target of the FTC and the state of Colorado.
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