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Tom Brown tenders for units
New York, June 14 - Tom Brown Inc. and Tom Brown Resources Funding Corp. said they have begun a cash tender offer for any and all of their $225 million outstanding units.
Each unit is made up of $512 principal amount of 7¼% senior subordinated notes due 2013 issued of Tom Brown Inc. and $488 principal amount of 7¼% senior subordinated notes due 2013 of Tom Brown Resources.
Tom Brown is also soliciting consents to amend the indenture for the notes.
For each $1,000 principal amount, Tom Brown is offering a price based on a fixed spread of 75 basis points over the yield on the 3.125% U.S. Treasury note due Sept. 15, 2008. The price will be calculated on the second business day before the consent solicitation expires and the total includes a $30.00 per $1,000 consent payment.
Holders must tender by the consent deadline of 5 p.m. ET on June 25 to receive the consent payment. The tender offer expires at midnight ET on July 12.
Tom Brown will also pay accrued interest up to but excluding the date of payment.
Holders cannot tender without delivering consents and vice versa.
The indenture changes require the approval of holders of a majority of the notes comprising the units.
Denver-based Tom Brown, an oil and gas exploration and production company, is also conducting a change-of-control tender offer following its acquisition by EnCana Corp., which closed on May 24.
In the change-of-control offer, Tom Brown is offering $1,010 per unit plus accrued interest up to but excluding the date of payment.
The change-of-control offer runs through midnight ET on July 12.
Merrill Lynch & Co. is dealer manager (888 ML4-TNDR or call collect 212 449-4914). The information agent and depositary is Global Bondholder Services Corp. (866 873-7700, banks and brokers may also call 212 430-3774).
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