Saks tenders for $658 million of notes, solicits consents for $1.22 billion of debt

New York, June 20 - Saks Inc. said it has begun a cash tender offer and consent solicitation for $658 million of notes in three series and a consent solicitation for two further series of notes and an issue of convertible notes. In total, $1.22 billion of debt is covered by the consent solicitations.

In the tender offer portion, Saks is offering $990 per $1,000 principal amount of its $250 million of 7½% notes due 2010, $208.105 million of 7% notes due 2013 and $200 million of 7 3/8% notes due 2019.

The total price for each series of notes includes a consent payment of $20 per $1,000 that will only be paid to holders who tender by 5 p.m. ET on July 1. The tender ends at midnight ET on July 18.

The consent solicitation-only portion covers Saks' $230 million of 2% convertible senior notes due 2024, $141.557 million of 9 7/8% notes due 2011 and $190.234 million of 8¼% notes due 2008.

The consent fee is $1 per $1,000 principal amount. The deadline is also 5 p.m. ET on July 1.

Under the consent solicitations, the Birmingham, Ala., department store operator is asking investors to waive any defaults arising from its failure to file required reports with the Securities and Exchange Commission until 5:30 p.m. ET on Oct. 31.

The solicitation would also rescind the notice of default received on June 14 from a hedge fund that says it owns 25% of Saks' 2% convertibles.

The tenders for each series of notes are subject to the company receiving consents from holders of a majority of notes in that series and the closing of previously announced asset sales. Holders who tender will be considered to have given consents and to have waived defaults.

The amendments and waivers require the receipt of consents from holders of a majority of the notes in each series.

Citigroup Global Markets Inc. (800 558-3745), Goldman, Sachs & Co. (800 828-3182), Banc of America Securities LLC (888 292-0070) and Wachovia Securities (866 309-6316) are dealer managers. Global Bondholder Services Corp. is the information agent (banks and brokers call 212 430-3774, others 866 470-3900).

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