American Greetings inks $600 million term loan, revolver to go private

By Susanna Moon

Chicago, April 1 - American Greetings Corp. said it obtained $600 million of loan commitments to help finance the $878 million deal to take the company private, including some debt.

The bank financing consists of a $400 million term loan and a $200 million revolving credit facility, with Bank of America, NA, Deutsche Bank AG New York Branch, KeyBank NA, Macquarie Capital USA, Inc. and PNC Bank NA, according to a company press release.

The company said on Sept. 28, 2012 that it received a going-private proposal from chief executive officer Zev Weiss and president and chief operating officer Jeffrey Weiss, as previously reported by Prospect News.

The deal also will be financed through the contributions of the American Greetings shares owned by the Weiss family, cash funded by a $240 million non-voting preferred stock investment committed by Koch AG Investment, LLC, a subsidiary of Koch Industries Inc., and cash on hand, the company said in the press release Monday.

Under the agreement, American Greetings shareholders, excluding the Weiss family and related entities, will receive $18.20 per share in cash, which is a premium of 26.9% over the trading price for class A shares on Sept. 25, 2012, the proposal date, and a premium of 13.0% over the closing trading price on March 28.

The deal price also includes the assumption of the company's 7 3/8% notes due 2021, which will remain outstanding after the transaction, the repayment of borrowings under the company's revolving credit facility and the settlement of stock options not held by the Weiss family.

The Cleveland-based greeting card company said it also could pay a one regular quarterly dividend of $0.15 per share.

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