Supervalu extends tender offer for New Albertson's 7.25% HITS

By Angela McDaniels

Seattle, Nov. 3 - Supervalu Inc. extended its tender offer for the outstanding 7.25% Hybrid Income Term Security Units (HITS) held in the form of corporate units of its wholly owned subsidiary New Albertson's, Inc. to midnight ET from 5 p.m. ET on Nov. 20.

The company said the change was made to ensure that the offer is open to holders of the corporate units for a sufficient period of time from commencement. The offer began on Oct. 23.

Supervalu will pay $25.22 in cash for each unit. The company will also pay the scheduled quarterly contract adjustment payment and interest payment, which together total $0.453 per unit, on Nov. 16.

New Albertson's is expected to delist any remaining corporate units from the New York Stock Exchange following settlement of the tender offer.

As of Oct. 20, 45,970,800 corporate units were outstanding. Each unit consists of a contract to purchase for $25 cash a fraction of a share of Supervalu's common stock on May 16, 2007 and a 2.5% ownership interest in one of the senior notes that is pledged to secure the holder's obligations under the purchase contract.

Supervalu is conducting the offer to reduce its amount of debt maturing in 2009 and avoid practical considerations and fees related to the remarketing process for the senior notes due 2009 associated with the corporate units.

The company will fund the tender offer with proceeds from a new $500 million issue of unsecured senior notes due 2014.

Settlement of the offer is subject to the successful completion of the issue of senior notes for at least $500 million. The offering of notes is not conditioned on settlement of the tender offer.

Merrill Lynch & Co. (888 654-8637 or collect 212 583-8206), Banc of America Securities LLC (800 654-1666 or collect 212 583-8206) and Credit Suisse Securities (USA) LLC (800 820-1653 or collect 212 325-2547) are the dealer managers for the tender offer. Innisfree M&A Inc. (877 800-5186) is the information agent, and U.S. Bank Trust NA is the tender agent.

Supervalu is a supermarket operator based in Eden Prairie, Minn.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.