Elizabeth Arden using new-deal proceeds to fund 11¾% tender, 10 3/8% redemption

New York, Jan. 6 - Elizabeth Arden, Inc. (B1/B+) said that it plans to use most of the proceeds of its upcoming sale of $150 million of new senior subordinated notes due 2014 to repurchase all of its outstanding 11¾% senior secured notes due 2011 under its previously announced tender offer and consent solicitation for the securities and to redeem $20 million of its 10 3/8% senior notes due 2007 under its previously announced planned redemption transaction for the notes.

The company said that the debt offering is conditioned on the success of the tender offer for the 11¾% notes.

As previously announced, Elizabeth Arden, a Miami Lakes, Fla.-based maker of cosmetics and fragrances, said on Dec. 24 that it had begun a cash tender offer for all of its $104 million of outstanding 11¾% notes, and was also soliciting noteholder consents to proposed indenture changes that would eliminate substantially all of the restrictive covenants, release all of the collateral securing the notes and eliminate certain default provisions.

The company set a consent deadline of midnight ET on Jan. 7, and said that the tender offer would expire at midnight ET on Jan. 22, with both deadlines subject to possible extension.

Elizabeth Arden said total consideration for the notes would be $1,200 per $1,000 principal amount of notes tendered and accepted for purchase, including a $20 per $1,000 principal amount consent fee for all holders tendering their notes by the consent deadline and thus consenting to the proposed indenture changes.

It said that holders tendering their notes after the consent deadline would receive $1,180 per $1,000 principal amount.

The company said holders could withdraw their tenders and revoke their consents at any time before the consent deadline, but not afterwards. Holders wishing to tender their notes must also consent to the indenture changes, and may not deliver consents to the indenture changes without also tendering their notes.

The tender offer is conditioned on the company receiving consents from holders representing at least 85% of the outstanding 11¾% notes before the consent deadline, as well as obtaining the requisite funding.

Elizabeth Arden also announced on Dec. 24 that it had called for the redemption on Jan. 23 of $20 million of its $155 million of outstanding 10 3/8% notes.

It said that while it planned to fund the redemption of the 10 3/8% notes from the proceeds of the new debt sale, the redemption of the 10 3/8% notes, unlike the tender offer, would not be conditioned on the new debt sale being completed as the tender offer is; the redemption will be funded with the company's revolving credit facility should the tender offer and the sale of the new notes not be consummated.

Questions regarding the tender offer may be directed to Marcey Becker, senior vice-president, finance at (203) 462-5809.

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