Milacron to increase price in tender for 7 5/8% eurobonds, eliminate early tender premium

New York, May 7 - Milacron Inc. (Caa2) said it would amend the terms of its previously announced cash tender offer for all of its outstanding 7 5/8% guaranteed eurobonds due 2005 issued by its Milacron Capital Holdings BV subsidiary, to increase the purchase price to be paid for validly tendered bonds which are not subsequently withdrawn to 104% of the principal amount of bonds tendered from the originally announced 100%.

The company said that it would also eliminate the originally announced May 6 early tender deadline and the early tender premium to be paid to holders tendering their bonds before then.

Milacron, which did not initially announce a tender offer expiration deadline, said that the offer would expire at 1 p.m. Central European Time (12 p.m. London time) on June 7, subject to possible extension.

The amended terms of the tender offer would apply retroactively. Holders of eurobonds that tendered them before the date of the amended terms would not be entitled to receive any early tender premium but would be entitled to receive the amount of the increased purchase price if they do not withdraw their bonds from the tender offer.

Milacron - which said it was undertaking the tender offer to help transform its capital structure - said that its refinancing costs for the second quarter will now be at least $1 million or as much as $15 million if the tender offer and the issuance of any new debt are completed in the quarter. In the company's guidance previously issued on April 26, the range of projected refinancing costs for the second quarter was $1 million to $10 million.

As previously announced, Milacron, a Cincinnati-based supplier of plastics-processing technologies and industrial fluids, said on April 26 that it planned to launch a cash tender offer the following day (April 27) for all of the €115 million of outstanding 7 5/8% bonds issued by Milacron Capital Holdings.

It said the offer would have an early tender deadline of 5 p.m. Central European Time on May 6, subject to possible extension but did not initially set an overall tender expiration deadline (the early tender deadline was subsequently eliminated, and an expiration deadline was eventually set).

The company said that subject to the terms and conditions of the expected tender offer, bondholders validly tendering their eurobonds and not subsequently withdrawing them would be entitled to receive 100% of the principal amount of their bonds, plus accrued interest up to but excluding the settlement date. In addition, holders validly tendering their bonds by or before the early tender deadline and not subsequently withdrawing their tenders would receive an early tender premium on the settlement date of €10 per €1,000 principal amount of the bonds tendered and not withdrawn (the basic tender offer consideration was later increased from 100%, and the early tender premium was eliminated).

Milacron further said that along with the tender offer, its Milacron Capital Holdings BV unit intends to call a meeting of the bondholders to consider an amendment to the terms of the bonds that would eliminate all of the restrictive covenants contained in the fiscal agency agreement under which the bonds were issued.

The company said that by tendering their bonds into the tender offer, holders will appoint the tender agent for the offer as their proxy to vote in favor of the amendment at the bondholder meeting.

It said that holders of the eurobonds will have certain withdrawal rights, which will be described in the official offering materials.

On April 27, Milacron announced the formal beginning of the tender offer for the bonds, on terms it had outlined the previous day (April 26).

Milacron said that completion of the tender offer and its obligations to make any payments would be conditioned up, among others things, that sufficient financing has been arranged to fund the payment of the total purchase price for the tender plus any early tender premium payments.

The dealer-manager for the offer will be Credit Suisse First Boston LLC (call 800 820-1653 or +44 207 883 6748); the tender agent will be Deutsche Bank AG (call +44 207 547 5000) and the information agent will be Innisfree M&A Inc. (call 888 750-5833 or (from the EU) 00 800 7710-9970). For further information, visit www.milacron.com or call the company's investor line: 800 909-MILA (800 909-6452).

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