Varsity Brands ups consent fee, again extends consent deadline for 10½% notes

New York, Sept. 10 - Varsity Brands, Inc. (B2/B-) said it was extending the consent deadline under its previously announced tender offer for its 10½% senior notes due 2007, to 5 p.m. ET on Sept. 10, subject to possible further extension, from the previous deadline at 5 p.m. ET on Sept. 9.

The company also increased the consent payment it is offering to holders tendering their notes (and thus consenting to proposed indenture amendments) by the consent deadline, to 0.625% of the principal amount of notes tendered from the originally announced 0.25%. Accordingly, total consideration for those holders tendering by the consent deadline has been increased to $1,041.25 per $1,000 principal amount from the original $1,037.50 per $1,000 principal amount.

All other original terms and conditions of the tender offer and consent solicitation are unchanged. Holders who had previously tendered their securities under the offer do not need to take any further action as a result of this extension.

As previously announced, Varsity Brands, a Memphis, Tenn.-based cheerleading products company, said on Aug. 13 that was starting a cash tender offer for all of its outstanding 10½% notes (Standard & Poor's said there were $115 million of the notes currently outstanding).

The company initially set a consent deadline of 5 p.m. ET on Aug. 26 and an expiration date of 5 p.m. ET on Sept. 12 (the deadlines were subsequently extended, the consent deadline as noted, while the offer will now expire at 12 midnight ET on Sept. 12).

It initially offered to pay $1,037.50 per $1,000 principal amount of notes tendered, which would include a consent fee of 0.25% of the principal amount for holders who tender by the consent deadline (the consent fee and the total consideration were subsequently increased, as noted).

Varsity Brands also said it was seeking consents to certain proposed amendments to the notes' indenture.

The company said the tender offer was being carried out in conjunction with the planned leveraged buyout of Varsity by a wholly-owned subsidiary of an affiliate of Leonard Green & Partners, LP, together with members of the company's senior management. Completion of the tender offer is conditioned upon, among other things, the consummation of the merger between Varsity Brands and VB Merger Corp., which was formed by Leonard Green & Partners for the purpose of acquiring majority ownership of Varsity.

Jefferies & Co., Inc. (800 933-6656) is dealer manager and information agent for the tender offer. The depositary is HSBC Bank USA.

Majestic extends consent solicitation

New York, Sept. 10 - Majestic Investor Holdings, LLC extend the consent solicitation for its 11.653% senior secured notes due 2007 to 5.00 p.m. ET on Sept. 12 from 5.00 p.m. ET on Sept. 10.

By the old deadline, $30.692 million of the notes had been tendered in the tender offer and consent solicitation.

As previously announced, Majestic Star Casino, LLC on Aug. 26 announced a cash tender offer for its $130 million 10 7/8% senior secured notes due 2006 and subsidiary Majestic Investor Holdings, LLC announced a cash tender offer for its $151.767 million 11.653% senior secured notes due 2007.

Majestic Star is offering $1,054.38 per $1,000 principal amount of the 10 7/8% notes. The price includes a consent payment of $5.00 per $1,000 principal amount for holders who tender by the consent deadline of 5.00 p.m. ET on Sept. 10.

From then up to the tender expiry date of 5.00 p.m. ET on Sept. 24, holders will receive $1,049.38 per $1,000 principal amount.

Majestic Star will also pay accrued interest up to but not including the date of payment.

The consent solicitation is to amend the indenture and release liens on the collateral securing the notes. The indenture amendment would eliminate substantially all the restrictive covenants and amend certain other provisions. A majority is needed to pass the changes.

Majestic Investor is offering $1,050.00 per $1,000 principal amount of the 11.653% notes. The price includes a consent payment of $5.00 per $1,000 principal amount for holders who tender by the consent deadline of 5.00 p.m. ET on Sept. 10 - a deadline now extended.

From then up to the tender expiry date of 5.00 p.m. ET on Sept. 24, holders will receive $1,045.00 per $1,000 principal amount.

Majestic Investor will also pay accrued interest up to but not including the date of payment.

The consent solicitation is to amend the indenture, terminate guarantees and release liens on the collateral securing the notes. The indenture amendment would eliminate substantially all the restrictive covenants and amend certain other provisions. A majority is needed to pass the changes and the consent of two thirds of the principal amount is outstanding is needed to release the liens.

For both offers, holders who tender will be required to deliver consents and consents can only be given on notes that are tendered.

Majestic Star is a Gary, Ind. gaming company. Subsidiary Majestic Investor operates three Fitzgeralds casinos.

Both offers are conditional on the receipt of consents and the completion of related financing transactions by Majestic Star.

MacKenzie Partners, Inc. (800 322-2885) is the information agent. The depositary is The Bank of New York.

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