GNC gets tenders for all floating-rate PIK, 8 5/8% notes, 98.9% of 8½% notes

By Jennifer Chiou

New York, March 16 - GNC Parent Corp. and General Nutrition Centers, Inc. announced that they received tenders from holders of all of the $425 million principal amount at maturity of GNC's floating-rate senior pay-in-kind notes due 2011 and General Nutrition Centers' $150 million of 8 5/8% senior notes due 2011 as well as 98.9% of the $215 million outstanding 8½% senior subordinated notes due 2010.

The companies also solicited consents to amend the indentures governing the notes to eliminate substantially all of the restrictive covenants and some events of default.

GNC executed supplemental indentures for all notes series on March 5, after having received tenders from a majority of noteholders, and they have become operative.

The offers expired at midnight ET on March 15. They began on Feb. 16.

For each $1,000 principal amount of General Nutrition Centers' notes, the company paid $1,066.40 for the 8 5/8% notes and $1,061.35 for the 8½% notes. The tender consideration was determined using the U.S. Treasury benchmark - the 4 3/8% U.S. Treasury notes due Dec. 31, 2007 for the 8 5/8% notes and the 4¼% U.S. Treasury note due Nov. 30, 2007 for the 8½% notes - plus 50 basis points. The company also paid accrued interest.

Noteholders who tendered their 8 5/8% notes or 8½% notes before 5 p.m. ET on March 1, the consent deadline, also received a $30.00 consent fee per $1,000 principal amount of notes.

The tender consideration and consent fee for the floating-rate PIK notes were not disclosed.

GNC said that all PIK and 8 5/8% notes have been canceled and discharged. The company also said it elected to effect a covenant defeasance and redemption of all remaining 8½% notes and has deposited cash in an irrevocable trust with U.S. Bank NA, as trustee, to redeem the notes on Dec. 1, 2007 at 104.25% plus accrued interest.

The tender offer for each series of notes was conditioned upon the substantially concurrent consummation of the merger of GNC Acquisition Inc. with and into GNC and the receipt of consents from holders of a majority of that series of notes.

GNC announced the completion of the acquisition of the company by affiliates of Ares Management LLC and Teachers' Private Capital, the private investment arm of Ontario Teachers' Pension Plan Board, for a total enterprise value of $1.65 billion.

The company also announced the close of its previously announced offering of $300 million of senior floating-rate toggle notes due 2014 and $110 million of 10¾% senior subordinated notes due 2015.

Proceeds from the notes sales were used to finance a portion of the transactions in connection with the acquisition, including repayment of company debt.

J.P. Morgan Securities Inc. (800 245-8812) and Goldman, Sachs & Co. (800 828-3182) are the dealer managers and solicitation agents, and MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) is the information agent.

GNC is the parent company of General Nutrition Centers, Inc., a Pittsburgh-based nutritional supplements retailer.

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