Vantage Oncology begins tender offer, solicits consents for 9½% notes

By Marisa Wong

Morgantown, W.Va., March 11 – Vantage Oncology, LLC and Vantage Oncology Finance Co. announced they are offering to purchase for cash any and all of their outstanding $300 million 9½% senior secured notes due 2017.

The issuers are also soliciting consents from holders of the notes to amend the indenture governing the notes, according to a press release. The proposed changes would, among other things, eliminate substantially all of the restrictive covenants and release the collateral securing the notes.

The proposed amendments require the consents of holders of a majority in principal amount of the outstanding notes, except for the collateral release, which requires consents from holders of at least two-thirds of the outstanding principal amount.

The tender offer and consent solicitation are being conducted in connection with McKesson Corp.’s planned acquisition of Vantage Oncology. The tender offer and consent solicitation are conditioned on, among other things, the closing of the acquisition. However, the completion of the tender offer and consent solicitation is not a condition to the consummation of the acquisition.

The tender offer is scheduled to expire at midnight ET on April 8.

Holders who tender their notes and deliver their consents by 5 p.m. ET on March 25, the early tender time, will be eligible to receive the total consideration. The total consideration will be calculated based on a fixed spread pricing formula and will include a consent payment of $30.00 per $1,000 principal amount.

Holders who tender their notes after the early tender time will receive the tender offer consideration, which will be the total consideration less the consent payment.

The issuers will also pay accrued interest up to, but not including, the applicable payment date.

Payment of the total consideration for all notes tendered by the early tender time is expected to occur on the closing date of the acquisition, which is expected to be around late March. Settlement of any remaining notes tendered in the offer after the early deadline will be made on or about April 11.

Tenders may be withdrawn at any time prior to 5 p.m. ET on March 25.

The acquisition will constitute a change of control under the notes’ indenture, the release said. As a result the issuers intend to make an offer to purchase any notes that remain outstanding after the early settlement date under a change-of-control offer and to issue a notice of optional redemption for the remaining notes.

Under the change-of-control offer, the issuers would purchase the remaining notes in cash at 101 plus accrued interest. Vantage expects that, once the acquisition closes, it will make the change-of-control offer. The purchase date for the change-of-control offer is expected to be 30 days after the closing of the acquisition.

Under the optional redemption, the notes would be redeemed on June 15 at par.

Wells Fargo Bank, NA (800 344-5128) is the tender agent and consent solicitation agent.

Based in Manhattan Beach, Calif., Vantage is a provider of radiation oncology, medical oncology and other value-based integrated cancer care services.

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