Petco prices tender consideration for 10¾% notes, receives needed consents

By Angela McDaniels

Seattle, Oct. 6 - Petco Animal Supplies, Inc. said its subsidiary, Petco Animal Supplies Stores Inc., will pay $1,054.51 per $1,000 principal amount of notes tendered during the cash tender offer and consent solicitation for its $89.267 million outstanding 10¾% senior subordinated notes due 2011.

The company priced the consideration on Friday based on the yield to the first call date plus 50 basis points over the yield on the 2.5% U.S. Treasury note due Oct. 31, 2006. The payout includes a $30.00 per $1,000 principal amount consent fee for notes tendered before the consent deadline, 5 p.m. ET on Oct. 5.

Noteholders who tender are required to deliver consents.

The tender offer ends at 9 a.m. ET on Oct. 23. As of the consent deadline, Petco received tenders and consents from holders of 100% of the notes, according to a company news release.

The consents will allow the company to eliminate most of the restrictive covenants and some events of default from the note indenture.

The tender offer is being conducted in connection with the pending acquisition of Petco by Leonard Green & Partners, LP and Texas Pacific Group.

Settlement of the offer is now dependent on successful completion of the acquisition.

Credit Suisse Securities (USA) LLC (800 820-1653 or collect 212 538-0652) is the dealer manager for the offer. Morrow & Co., Inc. (800 607-0088 or collect 203 658-9400) is the information agent.

Petco is a San Diego-based retailer of pet food, supplies and services.

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