Aventis tenders for 3.25% exchangeables into Rhodia

New York, Dec. 2 - Aventis said it its tendering for all its outstanding 3.25% exchangeable bonds due Oct. 22, 2003 which convert into Rhodia SA stock.

The Strasbourg, France drug company said it will pay 1.65% above the fair value of the bonds, a price that includes accrued interest.

The fair value will be set by discounting the cash flows of the bonds at a rate equal to the yield of the French government 6.75% OAT due Oct. 25, 2003 plus 25 basis points. The extra 25 basis points is to cover the credit spread.

Aventis said it will fix the price on the third business day of the offer.

The tender began on Nov. 29 and runs through Dec. 5. Settlement will be on Dec. 19.

There are currently 45,211,662 of the bonds outstanding with a nominal value of €23.22 each.

Aventis noted that the current level of Rhodia's stock means it is "highly unlikely" the bonds will be exchanged before maturity.

"As a result, Aventis believes that keeping the bonds outstanding is no longer justified," the company said.

It added: "This offer is intended to provide Aventis with increased flexibility regarding the disposal of its stake in Rhodia."

Although no specific means for unloading the stake has been selected at this stage, Aventis said it does not intend to sell the Rhodia shares underlying the bonds on the open market if it appears that doing so would have a negative impact on the market price of the shares.

Aventis said it has the option not to proceed with the offer if less than 80% of the bonds are validly tendered. If more than 90% of the bonds are tendered Aventis said it will use the squeeze-out provision in the bond terms.

JPMorgan Chase Bank is acting as financial advisor and Presenting Bank (Banque Présentatrice) for the offer. Information can be obtained from Aventis at + 33 (0) 388 99 1319, JPMorgan Securities Ltd. (London, UK) at + 44 (0) 207 325 0452, JPMorgan Chase Bank (Paris) at + 33 (0) 140 15 4169 and JPMorgan Bank (Luxembourg) at + 352 462 685 496. Investors who hold the bonds as ADNs should contact the Bank of New York at 800 507-9357.

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