Scotts extends tender offer for 8 5/8% notes

New York, Oct. 15 - The Scotts Co. (Ba3/BB) said that it has extended the expiration of its previously announced tender offer for its 8 5/8% senior subordinated notes due 2009 and the related consent solicitation. The expiration deadline was pushed back to 5 p.m. ET on Oct. 21 from the originally announced 5 p.m. ET on Oct. 14.

As of the old deadline, $384.7035 million principal amount of the notes, or about 96.18% of the $400 million outstanding, had been tendered, up from the $354.0605 million of the notes, or 88.52% of the outstanding amount, which had been received by the company by 5 p.m. ET on Sept. 29, the original consent expiration date.

Scotts said the tender offer was extended to coincide with the closing of its proposed new amended and restated senior secured credit facility, completion of which is one condition to completion of the tender offer.

As previously announced, Scotts, a Marysville, Ohio maker consumer lawn and garden-care products, said on Sept. 15 that it would tender for any and all of its $400 million of outstanding 8 5/8% notes and was also soliciting noteholder consents to proposed indenture changes that would eliminate substantially all of the restrictive covenants contained in the indenture.

It originally set a consent deadline/early consent date of 5 p.m. ET on Sept. 29, and said the tender offer would expire at 5 p.m. ET on Oct. 14 (Scotts subsequently extended the time holders have to tender and still receive the early consent premium, to coincide with the offer expiration date, which it has now extended).

Scotts said the tender offer and consent solicitation is part of a refinancing transaction that would also include an estimated $1.2 billion senior credit facility as well as $200 million in senior subordinated notes. Scotts said it would finance the tender offer with proceeds from the planned offering of senior subordinated notes and the proposed new senior credit facility (high yield market syndicate sources said that Scotts successfully sold $200 million of new 6 5/8% senior subordinated notes due 2013 on Oct. 1).

It initially said that noteholders validly tendering their notes and not withdrawing them by the consent deadline would receive $1,060.50 per $1,000 principal amount tendered, which includes an early consent premium of $20 per $1,000 principal amount, while noteholders validly tendering their notes after the consent deadline but before the tender offer expires would receive $1,040.50 per $1,000 principal amount but would not receive the consent payment (Scotts, as noted, subsequently extended the period of noteholder eligibility for the early consent payment to coincide with the offer expiration). All tendering noteholders will additionally be paid accrued and unpaid interest up to, but not including, the date of payment for the notes. The payment date is expected to promptly follow the expiration.

Holders who tender their notes under the terms of the offer will also be required to consent to the proposed amendments.

Scotts said the tender offer would be subject to the satisfaction of certain conditions, including its receipt of consents from the holders of the requisite principal amount of the notes and the completion of the refinancing transactions. On Sept. 30, Scotts said that it had received tenders and related consents from more than 88% of the notes, exceeding the requisite amount of consents to the proposed indenture changes, so accordingly, Scotts and the notes' indenture trustee executed a supplemental indenture to eliminate certain covenants and related provisions in the indenture governing the notes. The company said that these amendments would not become operative until Scotts accepts and pays for all notes validly tendered by the tender offer expiration date.

Citigroup Global Markets Inc. (contact the Liability Management Group 800 558-3754 or collect at 212 723-6106) and Banc of America Securities LLC (contact High Yield Special Products at 888 292-0070 or collect at 704 388-9217) are the dealer managers for the offer. The information agent and depositary is Global Bondholder Services Corp. (866 470-3800 or 212 430-3774).

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