Alliance Data Sues to Preserve Deal

Blackstone said Monday federal regulators were getting in the way of its $6.4 billion purchase, telling Alliance the Office of the Comptroller of the Currency had slapped "unprecedented and unacceptable financial and operational requirements" on the deal. Blackstone has offered to rework the terms of the deal.

Alliance said the acquisition agreement requires Blackstone to make a "best effort" to comply with the OCC's requests, which the company believes are reasonable. It "seeks specific performance to compel Blackstone to comply with its obligations under the merger agreement," Alliance said in a statement.

Alliance said Blackstone is "unwilling to satisfy fundamental requirements specified in the OCC letter."

Other private equity deals have fallen through in recent months, most notably a planned purchase of student-loan provider Sallie Mae, as the terms of borrowing became more expensive, making takeover targets less attractive.

Alliance filed the suit against Alladin Solutions Inc. and Alladin Merger Sub Inc. units set up by Blackstone to handle the deal in the Delaware Court of the Chancery.

Akin Gump Strauss Hauer & Feld LLP and Delaware law firm Prickett, Jones & Elliott are representing Alliance.

Alliance Data shares fell 72 cents to $42.28 in midday trading. Blackstone shares lost 23 cents to $18.76.

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AP Business Writer Jeremy Herron in New York