ATK begins tender offer for $195.95 million 3% convertibles due 2024

By Susanna Moon

Chicago, June 2 - ATK said it began a cash tender offer for its $195,951,000 principal amount of its outstanding 3% convertible senior subordinated notes due 2024.

The tender offer will end at midnight ET on June 27.

The purchase price for each $1,000 principal amount will be equal to the sum of (i) the average volume-weighted average price multiplied by 13.1023, the conversion rate, plus (ii) an amount equal to the amount of interest that would accrue on the notes to but excluding Aug. 20, which is the first day that the company may redeem the notes, plus (iii) a fixed cash amount of $2.50, according to a company press release.

The purchase price will be between $1,382.41 and $1,906.50 per $1,000 principal amount.

Holders also will receive accrued interest to but excluding the settlement date.

In addition, the company plans to make a payment to bondholders in connection with a dividend on its stock set for June 26. Holders must be of record at the close of business on June 2.

The payment for each $1,000 of notes will be in an amount equal to the per share amount of the dividend multiplied by 13.1023.

The averaging period for the average VWAP will be the 15 consecutive scheduled trading days beginning June 5 and ending June 25.

Pricing will be set promptly after the close of trading on the New York Stock Exchange on June 25.

The repurchase will be funded using cash on hand, borrowings from the company's revolving credit facility and a new incremental term loan.

The tender offer is not subject to any minimum tender condition but is subject to a financing condition.

The tender offer is conditioned upon the receipt of financing proceeds of new debt in an aggregate principal amount of at least $100 million.

"While we are obligated to settle these notes before the anticipated completion of the Orbital Sciences transaction, taking this action now reaffirms our expectation of delivering operational excellence, earnings growth, and shareholder value this year," ATK president and chief executive officer Mark DeYoung said in the press release.

BofA Merrill Lynch (888 292-0070) is the dealer manager. Global Bondholder Services Corp. (866 470-4200 or 212 430-3774 collect) is the depositary and the information agent.

ATK is an aerospace, defense, and commercial products company based in Arlington, Va.

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