Jean Coutu accepts $847.117 8½% notes, $349.99 million 7 5/8% notes in early settlement

By Jennifer Chiou

New York, June 4 - The Jean Coutu Group (PJC) Inc. said it accepted for purchase the $847.117 million of its $850 million 8½% senior subordinated notes due 2014 and $349.99 million of its $350 million 7 5/8% unsecured senior notes due 2012 tendered by 9 a.m. ET on June 4, the early settlement date.

As already reported, the company may accept tendered notes prior to the tender offers' expiration if Rite Aid Corp.'s pending purchase of the Jean Coutu Group USA Inc. closes during the tender offers. Noteholders will receive payment on the second day following the company's acceptance of the notes.

The early settlement date was previously expected to be June 1. The date was delayed because it was contingent upon the acquisition closing, which was no longer expected to occur by June 1.

The tender offers will expire at 8 a.m. ET on June 14. The deadline was extended from May 25 and, previously, from April 26.

For each $1,000 principal amount, the company will pay $1,079.43 for the 8½% notes and $1,059.20 for the 7 5/8% notes.

The tender consideration was determined at 2 p.m. ET on May 30 using the yield of the 3 5/8% U.S. Treasury note due July 15, 2009 plus 150 basis points.

The tender consideration includes a $35.00 consent payment for noteholders who tendered and delivered consents by 5 p.m. ET on May 31 for the 8½% notes and by 5 p.m. ET on March 5 for the 7 5/8% notes, the consent expiration date. Noteholders who tender must consent to the proposed amendments.

As of May 24, 99.7% of the outstanding 8½% notes and more than 99.9% of the outstanding 7 5/8% notes had been tendered.

Because the company received consents from holders of a majority of the notes, it is able to amend the indentures to eliminate most of the restrictive covenants. The company said it executed supplemental indentures.

J.P. Morgan Securities Inc. (866 834-4666) is the dealer manager for the tender offer for the 7 5/8% notes, and Global Bondholder Services Corp. (866 540-1500) is the information agent for both offers.

Jean Coutu Group is a drugstore chain based in Longueuil, Quebec. Jean Coutu Group USA includes 1,858 drugstores, of which 337 are Brooks stores and 1,521 are Eckerd stores, and six distribution centers.

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