Specialty Foods to buy back or exchange nearly all exchangeables

No holders chose to participate in placement of new 8% notes, warrants

By Angela McDaniels

Tacoma, Wash., Feb. 10 - Specialty Foods Group, Inc. announced the results of its tender offer and exchange offer for its junior secured exchangeable debentures and of Specialty Foods Group Canada Holdings, Inc.'s tender offer for its junior secured exchangeable subordinated debentures.

Holders tendered C$3,511,000, or 12%, of Specialty Foods Group's debentures for repurchase and C$20,263,000, or 69.4%, of the debentures for exchange.

The company said C$5.41 million of its notes held by Specialty Foods Group Canada, representing 18.5% of the principal amount of the debentures outstanding, will be tendered in conjunction with the notes issued by Specialty Foods Group Canada.

In exchange for each C$1,000 principal amount of debentures tendered, Specialty Foods Group offered (a) C$1,150 of cash or (b) an identical principal amount of 8% junior secured notes due June 30, 2014 and 0.04110997 warrants. Each warrant will entitle its holder to purchase one common share of Specialty Foods Group Parent, Inc. for C$1.00.

In its offer, Specialty Foods Group Canada offered C$1,150 per C$1,000 principal amount of debentures.

Holders tendered C$5,097,000, or 94.2%, of Specialty Foods Group Canada's debentures.

Both offers expired at midnight ET on Feb. 8.

Holders will also receive accrued interest for tendered or exchanged debentures up to but excluding the closing date, which is expected to be Feb. 13.

The company will use cash on hand or its credit facilities to fund the offers.

Following the settlement of the offers, C$6,000 of Specialty Foods Group's debentures and C$313,000 of Specialty Foods Group Canada's debentures will remain outstanding.

Private placement

Holders who participated in Specialty Foods Group Canada's offer who are also accredited investors were given the option to purchase new notes and warrants in a private offering.

The company said it did not receive any elections to participate in the private placement.

In order to participate in the private placement, a holder would have been required to purchase an amount of new notes and warrants in the private placement with a purchase price equal to the amount credited to that holder in repayment of that holder's debentures under the tender offer, exclusive of interest.

For a price of C$1,150, purchasers would have received C$1,000 principal amount of the new 8% notes and 0.04110997 warrants.

The company produces and markets processed meat products and is based in Hampton, Va.

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