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Kellwood cancels tender offer for up to $60 million 7 7/8% notes
By Angela McDaniels
Tacoma, Wash., Feb. 11 - Kellwood Co. terminated the cash tender offer for up to $60 million of its 7 7/8% senior notes due 2009, according to a company news release.
The offer was cancelled as part of the company's merger agreement with Sun Capital Securities Group, LLC, under which Kellwood agreed to remove all impediments to Sun Capital's $21.00-per-share tender offer for Kellwood's shares.
Under the agreement announced on Monday, the two companies will merge if Sun Capital acquires a majority of Kellwood's shares and successfully completes its tender offer on Feb. 12.
Kellwood first began its tender offer for the 7 7/8% notes on Jan. 8. The company was offering $1,035 per $1,000 principal amount of notes - which included an early tender premium of $30.00 for notes tendered by 5 p.m. ET on Feb. 13 - plus accrued interest to the payment date.
The offer was set to expire at midnight ET on Feb. 6. As of midnight ET on Jan. 27, holders had tendered $133.7 million of notes.
Kellwood planned to fund the offer with a portion of the proceeds from the sale of its Smart Shirts business.
On Jan. 15, Sun Capital said it was prepared to reduce its offer price to $19.50 per share if Kellwood did not terminate the tender offer for its 7 7/8% notes as Sun Capital had asked on Jan. 10. According to Sun Capital, the reduced price would reflect the decrease in Kellwood's equity value resulting from the bond tender and other "ill-advised initiatives."
J.P. Morgan Securities Inc. (866 834-4666 or call collect 212 834-3424) was the dealer manager for Kellwood's tender offer. Global Bondholder Services Corp. (866 470-3900 or call collect 212 430-3774) was the information agent.
Kellwood is a St. Louis-based marketer of apparel and consumer soft goods.
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