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Toys 'R' Us sets pricing in tender for 6.25% notes underlying equity units
New York, May 2 - Toys "R" Us, Inc. announced pricing in its cash tender offer for the $402.5 million of senior notes due Aug. 16, 2007 that underlie its equity security units.
The company will pay a fixed cash amount of $20.625 plus $991.80, the price for the underlying zero-coupon U.S. Treasury, per $1,000 principal amount.
The notes were issued in May 2002 as part of the units along with a purchase contract for common stock, which is collateralized by the note. The tender does not affect the purchase contract.
The Wayne, N.J., toy retailer announced the tender on April 7 is in response to a request from Global Toys Acquisition, LLC, the investment group consisting of affiliates of Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. and Vornado Realty Trust, that is buying Toys "R" Us.
For each $1,000 principal amount of notes, Toys "R" Us is offering a cash payment of $20.625 plus the price of a zero-coupon U.S. Treasury security with a principal amount at maturity of $1,000 and a maturity date of Aug. 15, 2005, as determined on the second business day prior to the expiration date of the offer.
The tender ends at 11:59 p.m. ET on May 3.
The $20.625 cash component will be made directly to holders.
By tendering their notes, holders whose notes are currently held under the pledge arrangement for the units will direct the depositary agent for the tender offer to use the payment for the zero-coupon Treasury to buy the Treasury securities which are required to be substituted as collateral under the pledge arrangement as security for the tendering holders' obligations under the purchase contracts.
Credit Suisse First Boston is dealer manager (call collect 212 325-2130), and Georgeson Shareholder Communications Inc. is information agent (800 561-4106, banks and brokers call 212 440-9800).
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