Tommy Hilfiger to get new facility, tender for bonds for Apax LBO

By Sara Rosenberg

New York, Dec. 23 - Tommy Hilfiger Corp. plans to obtain a new credit facility, which will be led by Citigroup and Credit Suisse First Boston, to help fund its leveraged buyout by Apax Partners, according to a company news release.

Furthermore, in connection with the LBO, the company will commence cash tender offers and consent solicitations for its outstanding 6.85% notes due 2008 and 9% senior bonds due 2031, with the successful completion of these offers being one of the conditions of the purchase agreement.

The credit facility syndicate is expected to include Fortis Bank, the company's existing relationship bank in Europe, at a senior level, the news release added.

No other details on financing were available prior to press time.

Under the acquisition agreement, Apax will acquire Tommy Hilfiger for $16.80 per share in cash, representing a transaction value of $1.6 billion.

The transaction is expected to close in spring 2006, subject to shareholder approval, financing, customary regulatory and other closing conditions and, as was already mentioned, the bond tender offers.

"In August, the board retained J. P. Morgan Securities Inc. to assist the company in reviewing its strategic alternatives. This review included careful consideration of a variety of options, including recapitalizations, restructurings, share buybacks and other measures to create value, including a possible sale of the company," said David F. Dyer, chief executive officer, in the release.

"As part of this effort, the board undertook a wide-ranging auction process, ultimately resulting in the unanimous determination by the company's independent directors that the offer from Apax Partners was in the best interests of the company and our shareholders."

Tommy Hilfiger is a Hong Kong-based clothing company.

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