Pactiv gets consents for 93.36% of 6.4% notes; tender offer for 5 7/8% notes nixed

By Devika Patel

Knoxville, Tenn., Oct. 19 - Pactiv Corp. said holders tendered 93.36% of its $250 million of 6.4% notes due Jan. 15, 2018 by 5 p.m. ET on Oct. 18, the early tender/consent deadline in the company's cash tender offer for any and all of the notes. The tender is being conducted in connection with the acquisition of the company by Reynolds Group Holdings Ltd.

The company also said it canceled its tender offer for any and all of its $250 million in 5 7/8% notes due July 15, 2012. Pactiv expects that it will promptly begin a change-of-control offer for these notes, which will be completed no earlier than 30 days after it begins.

The tender offer and consent solicitation for the 6.4% notes are conditioned on the completion of the merger.

Pactiv is seeking consents to amend the 6.4% note indenture to eliminate the change-of-control covenants. As they stand, the covenants require Pactiv to make an offer to repurchase all or any portion of the notes with a change-of-control triggering event. The company has received the consents it needed to institute the proposed amendment, and it expects to issue a supplemental indenture reflecting this change. The amendment will not become effective unless the tender offer is completed.

The offer for the 6.4% notes launched on Oct. 5 and will end at 8 a.m. ET on Nov. 2.

Under the offer, the company will pay $1,012.50 per $1,000 of notes, including an early tender premium of $10.00 and a consent fee of $2.50 only for those who tendered by the early tender deadline. This deadline was also the withdrawal cutoff.

Holders will also receive accrued interest.

As already reported, under the agreement, Pactiv shareholders will receive $33.25 in cash per share for a total purchase price of $4.6 billion. However, the transaction is valued at $6 billion.

Closing on the acquisition is targeted by the end of this year, subject to Pactiv shareholder approval, regulatory approvals and customary conditions. The acquisition is not conditioned on the receipt of equity or debt financing.

Credit Suisse Securities (USA) LLC is the dealer manager and solicitation agent (800 820-1653 or call collect 212 538-2147). D.F. King & Co., Inc. is the information agent (800 714-3312 or call collect 212 269-5550).

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

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