Messer Griesheim begins tender for 10 3/8% notes

New York, April 21 - Messer Griesheim Holding GmbH said it has begun a cash tender offer for all of its outstanding 10 3/8% senior notes due 2011 and was also soliciting noteholder consents to proposed changes in the notes' indenture.

It set a consent deadline of 5 p.m. London time on May 4, the same day on which the company will determine the price it will pay for the notes. The tender offer will expire at 5 p.m. London time on May 19, with all deadlines subject to possible extension.

The company - a German-based maker of industrial gasses formerly known as Messer Griesheim Holding AG - issued €550 million principal amount of the notes, of which €56.292 million are held by a company affiliate; that leaves €493.708 million outstanding and in the hands of investors and subject to the tender offer and consent solicitation.

It said that if the offer is completed, it will pay total consideration in an amount to be determined on the pricing date, based on a fixed spread of 50 basis points over the yield to maturity on the 6¼% German Bundesanleihe security due April 26, 2006. Total consideration will also include a consent payment equal to €30 per €1,000 principal amount of notes purchased for those noteholders tendering their notes, and thus delivering related consents, by the consent deadline. Noteholders who tender after the consent deadline but before the expiration will receive the total consideration minus the consent payment.

The company is asking noteholders to consent to certain proposed amendments and waivers that would eliminate or waive substantially all of the restrictive covenants, certain events of default and certain additional covenants and rights contained in the notes and their indenture.

The amendments and waivers would also direct the London branch of The Bank of New York, as indenture trustee, to give its consent to the early settlement of the repayment obligations under and the subsequent termination of the High Yield Loan Proceeds Agreement, dated May 16, 2001, between Messer Griesheim Holding GmbH, as lender, and its Messer Griesheim GmbH subsidiary, as borrower, as well as to the early termination of the High Yield Subordination Agreement, dated May 16, 2001, between the two entities (Messer Griesheim Holding is the subordinated lender and Messer Griesheim GmbH is the borrower).

The company said that noteholders may not tender their notes without also consenting to the proposed amendments and vice versa. After the consent deadline, noteholders will not be able to withdraw tendered notes and related consents except under limited circumstances described in the official offer document.

It said the tender offer would be conditioned on the valid tender of notes and delivery of related consents by holders of at least a majority of the principal amount of the outstanding notes not subject to any rights of withdrawal and the completion of the company's previously announced sale of the entire share capital of Messer Griesheim GmbH to Air Liquide International SA.

The sale of Messer Griesheim GmbH will be subject to the satisfaction or waiver of certain closing conditions, including receipt by the parent company of the necessary antitrust regulatory approvals from the European Commission and the U.S. Federal Trade Commission, and the Messer family obtaining antitrust regulatory approvals related to, and financing commitments for, the reorganization of the ownership structure of Messer Griesheim Holdings GmbH's controlling shareholder, Messer Griesheim Group GmbH & Co. KgaA. In this reorganization of the ownership structure, the Messer family's partners in Messer Griesheim Group - Allianz Capital Partners and private equity funds managed by affiliates of Goldman Sachs International - will sell their combined 67% interest in Messer Griesheim Group to the Messer family under an option agreed to in 2001.

The sale of Messer Griesheim GmbH to Air Liquide will also be subject to the approval by its creditors and certain of its affiliates of the sale itself and certain related transactions.

It will also be subject to a restructuring of the company's operations having been implemented, under which all of the operations not being sold to Air Liquide are to be transferred to Messer Griesheim Group or to Messer Griesheim Holdings or any of its or their legal successors or affiliates, and it will be subject to the receipt by Messer Grieshiem Holdings of the required amount of tenders from its 10 3/8% noteholders.

Goldman Sachs International is acting as the exclusive dealer manager for the offer (contact Dominic Ashcroft at +44 (0) 20 7774 0923). The tender agents for the offer are The Bank of New York and The Bank of New York (Luxembourg) SA; The trustee for the notes is The Bank of New York, London Branch.

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