Clearwater Paper tenders for Cellu Tissue's 11½% notes due 2014

By Jennifer Chiou

New York, Nov. 9 - Clearwater Paper Corp. announced the start of a cash tender offer for any and all of Cellu Tissue Holdings, Inc.'s $234,484,000 of 11½% senior secured notes due 2014.

In September, Clearwater announced plans to issue $350 million of senior notes to help fund its acquisition of Cellu Tissue Holdings. Under the agreement, Clearwater is buying Cellu Tissue for $12 per share in cash. The transaction is valued at $502 million, including equity value of about $247 million and net debt of roughly $255 million.

As a result of the merger, Cellu Tissue will become a wholly owned subsidiary of Clearwater Paper.

Those who tender their notes prior to 5 p.m. ET on Nov. 19 will receive an early tender payment of $30.00 per $1,000 of notes that will be included in the payout plus accrued interest to the payment date. The payout will be determined using the 0.875% Treasury due May 31, 2011 plus a fixed spread of 50 basis points.

The offer will end at 9 a.m. ET on Dec. 7.

The notes have a redemption date of June 1, 2011 and a redemption price of $1,115 per $1,000 principal amount.

The tender offer is conditioned on Clearwater Paper's waiver of certain conditions.

Closing on the transaction is expected in the fourth quarter, subject to stockholder approval, regulatory clearances and other customary conditions.

D. F. King & Co., Inc. is the information agent (800 431-9643). BofA Merrill Lynch is the dealer manager (attn: Debt Advisory Services at 980 388-9217 or 888 292-0070).

Clearwater is a Spokane, Wash.-based manufacturer of consumer tissue, bleached paperboard and wood products. Cellu Tissue is an Alpharetta, Ga.-based manufacturer of tissue products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.