Millar Western tenders for 9% notes

New York, Nov. 10 - Millar Western Forest Products Ltd. (B3) said that it has begun a cash tender offer for all its US$160 million principal amount of 9 7/8 % senior notes due 2008, and is also soliciting consents from the noteholders to approve certain amendments to the notes' indenture.

It set a consent deadline of 5 p.m. ET on Nov. 18, and said the tender offer would expire at 12 a.m. ET on Dec. 5, with both deadlines subject to possible extension.

Millar Western, an Edmonton, Atla.-based integrated forest products company, said that the total consideration to be paid to holders tendering their notes and delivering their consents by the consent deadline would be $1,051.88 per $1,000 principal amount of notes validly tendered and accepted for purchase, and would include a consent payment of $2.50 per $1,000 principal amount. Holders tendering their notes after the consent deadline but prior to the offer's expiration would not receive the consent payment, but only $1,049.38 per $1,000 principal amount.

The company said the tender offer would be subject to various conditions, including the receipt of consents necessary to approve the amendments to the notes' indenture. The consents being solicited will eliminate substantially all of the covenants and certain events of default, and will reduce the minimum notice period for the redemption of senior notes by the company to three days from 30 days.

Millar Western is expected to fund the tender from the expected proceeds of a $175 million Rule 144A offering of 10-year notes, high yield market syndicate sources said.

The company said that it intends to redeem all senior notes not tendered and accepted for payment shortly after the expiration or termination of the tender offer at a price of $1,049.38 per $1,000 principal amount, plus accrued and unpaid interest to, but not including, the redemption date.

Goldman, Sachs & Co. is the exclusive dealer manager and solicitation agent (call at 800 828-3182 or collect at 212 357-3019. Documentation can be obtained from the information agent D.F. King & Co., Inc., which is also serving as the tender agent (call 800 549-6650 or collect at 212 269-5550).

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