UAP, United Agri Products extend tender offers for 8¼%, 10¾% notes

New York, May 24 - UAP Holding Corp. (Caa2/B-) and its wholly owned subsidiary, United Agri Products Inc. (B3/B), said they had extended their previously announced tender offers and related consent solicitations for UAP's 10¾% senior discount notes due 2012 and United Agri Products' 8¼% senior notes due 2011.

Those offers were extended to 5 p.m. ET on June 4, subject to possible further extension, from the originally announced deadline for each of 9 a.m. ET on May 24.

The companies said that they were advised by the depositary for the tender offers and consent solicitations that as of 5 p.m. ET on May 21, all $125 million of the outstanding principal amount at maturity of the UAP 10¾% notes had been tendered by their holders and not withdrawn, up from the $122.5 million which the company previously said had been tendered as of 5 p.m. ET on May 10, when the consent solicitation portion of the tender offer expired as scheduled without extension. As of 5 p.m. ET on May 21, all $225 million of the outstanding principal amount of United Agri Products' 8¼% notes had been tendered and not later withdrawn, unchanged from the amount tendered as of the consent deadline.

As previously announced, UAP and United Agri Products - a Greeley, Colo.,-based distributor of seeds and agricultural chemicals - said on April 27 that UAP was offering to purchase for cash any and all of its outstanding $125 million principal amount at maturity of 10¾% notes, while United Agri Products would purchase for cash any and all of its outstanding $225 million of 8¼% notes. The companies said they were also soliciting noteholder consents to proposed indenture changes that would eliminate most of the restrictive covenants in the respective indentures, and would eliminate the registration rights and liquidated damages provided for in the registration rights agreements applicable to the notes.

UAP initially said the total consideration to be paid for tendered and accepted 10¾% notes would be $819.04 per $1,000 principal amount at maturity, including a $20 per $1,000 consent payment payable only to holders who validly tender their notes by the consent deadline. That consideration was subsequently amended.

United Agri Products said that total consideration to be paid for tendered and accepted 8¼% notes would be a blended price, based upon the $1,082.50 per $1,000 principal amount price at which United Agri Products could redeem a portion of the notes with the proceeds of an equity offering, and the present value of future cash flows up to and including Dec. 15, 2007 - the first date on which the notes may be redeemed - on the notes, based on the assumption that the notes will be redeemed in full at $1,041.25 per $1,000 principal amount on such date, discounted at a rate equal to 137.5 basis points over the yield to maturity on the 3 % U.S. Treasury note due Nov. 15, 2007.

United Agri Products said the total consideration on the 8¼% notes would include a $20 per $1,000 principal amount consent payment for holders tendering their notes by the consent deadline, and it will also include accrued but unpaid interest on the notes up to, but not including, the payment date.

Holders tendering either series of notes would be required to consent to the proposed indenture amendments and the registration rights agreement changes. Tenders of notes prior to the consent deadline could be validly withdrawn and consents could be validly revoked at any time before 5 p.m. ET on the consent deadline, but not after that, unless the tender offers and the consent solicitations were to be terminated without any notes being purchased. Holders tendering their notes after the consent deadline but before the offer expires will not receive the consent payment as part of their consideration.

On May 7, UAP and United Agri Products extended the offer's consent deadline to 5 p.m. ET on May 10, subject to possible further extension, from the originally announced 5 p.m. ET on May 7, and said that as of 5 p.m. ET on May 6, $171.695 million principal amount of the 8¼% notes and $26.67 million principal amount at maturity of the 10¾% notes had been validly tendered.

UAP also said it had amended the total consideration it is offering for the 10¾% notes; such consideration would now be calculated as the product of (x) the accreted value of the 10¾% notes on the date that is 30 days immediately following the payment date for the 10¾% notes' tender offer and (y) 116.125%, of which $20 would be the consent payment. The originally announced total consideration to be paid for the 10¾% notes was to have been $819.04 per $1,000 principal amount at maturity, of which $20 was the consent payment.

On May 10, United Agri Products said it had set the total consideration and tender offer consideration it will pay for the 8¼% notes; total consideration will be $1,123.56 per $1,000 principal amount of notes tendered by holders and accepted for payment, based on an assumed payment date of May 28. The total consideration includes a consent payment of $20 per $1,000 principal amount consent payment for holders who tendered by the May 10 consent deadline; holders tendering after the consent deadline but before the offer expiration will not receive the consent payment as part of their consideration.

The companies said the tender offers would each be subject to, among other things, that United Agri Products amend its existing revolver and enter into a new senior secured second-lien term loan facility, the net proceeds of which will be used to pay the consideration for the notes purchased in the tender, and upon consummation of UAP Holdings' offering of Income Deposit Securities, the net proceeds of which will be used, among other things, to pay the consideration for the notes purchased in the tender offers. On May 18, UAP said in an S-1A filing with the Securities and Exchange Commission that it plans to raise about $680 million via the sale of $640 million of income deposit securities, along with a separate offering of $39.7 million of senior subordinated notes due 2019.

The companies have retained UBS Investment Bank to act as dealer manager for tender offers and consent solicitations (call the UBS Liability Management Group at 888 722-9555 ext. 4210 or at 203 719-4210).

MacKenzie Partners Inc. is the information agent (call 212 929-5500 or 800 322-2885). JP Morgan Chase Bank is the depositary for the offer.

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