AKI gets required consents for 10½% notes, extends offer

New York, Sept. 2 - AKI (B2/B+) said it received the required number of consents to proposed indenture changes from the holders of its 10½% senior notes due 2008 as part of the tender offer and consent solicitation for those notes. The company also extended the expiration of the tender offer and said that all tendering holders would receive the total consideration to be paid for the notes.

AKI said that as of the consent deadline, which expired as scheduled at 5 p.m. ET on Sept. 1, it had received tenders and consents for approximately 83% of the outstanding principal amount of the notes. Having received the required consents, it plans to execute a supplemental indenture incorporating the proposed changes, along with The Bank of New York, the indenture trustee. However, the amendments will not become operative until the notes are accepted for purchase by the company.

AKI further said that it is extending the expiration of the offer to 5 p.m. ET on Sept. 24, subject to possible further extension, from the original deadline at 5 p.m. ET on Sept. 17, and said it will also pay the consent payment as part of the total consideration for the notes to all noteholders tendering their notes by that extended deadline.

As previously announced, AKI, a New York-based global marketer and manufacturer of multi-sensory marketing, interactive advertising and sampling systems in the fine fragrance, cosmetics and personal care industries, as well as other consumer products industries, said on Aug. 19 that it had begun a cash tender offer for any and all its $103.510 million of outstanding 10½% notes and was also soliciting noteholder consents to proposed indenture amendments that would eliminate substantially all of the restrictive and reporting covenants, certain events of default and certain other provisions contained in the indenture.

The company set a consent deadline of 5 p.m. ET on Sept. 1 and originally said the tender offer would expire at 5 p.m. ET on Sept. 17; the expiration deadline was later extended.

AKI said it was undertaking the consent solicitation in connection with the previously announced transactions with affiliates of Kohlberg Kravis Roberts & Co. and DLJ Merchant Banking Partners, including the merger of AHC I Acquisition Corp., AKI's parent, with AHC Merger Inc., a wholly owned subsidiary of Fusion Acquisition LLC, and the contribution of AHC I Acquisition to Jostens Holding Corp.

The company said noteholders tendering their notes by the consent deadline would receive a consent payment of $20 per $1,000 principal amount of notes tendered and accepted for purchase as part of the total consideration to be paid for the notes, which will be $1,028.75 per $1,000 principal amount. It originally said that holders tendering their notes after the consent deadline would not receive the consent payment as part of their consideration but later dropped this provision. All tendering holders will also be paid accrued and unpaid interest, if any, up to but not including the payment date.

AKI intends to fund the tender offer and consent payments with a portion of the proceeds from senior secured term loan and revolving credit facilities totaling up to $1.3 billion principal amount and a $500 million increasing-rate bridge loan to be secured by Jostens IH Corp., a wholly owned subsidiary of Jostens Holding Corp., (or, in lieu of the bridge loan, the incurrence of other debt by Jostens IH Corp.) in connection with the Kohlberg Kravis/DLJ transactions.

Completion of the tender offers and consent solicitations will be subject to several conditions, including the satisfaction or waiver of the conditions to the closing of the transactions, and the receipt by AKI of consents to the proposed amendments from the holders of at least a majority of the total principal amount of outstanding notes, and the execution of a supplemental indenture to the indenture governing the notes.

Credit Suisse First Boston LLC will serve as the dealer manager and solicitation agent for the tender offers and the consent solicitations (call 212 538-0652 or 800 820-1653). MacKenzie Partners Inc. is the information agent (800 322-2885 or by email at proxy@mackenziepartners.com).

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