Tesco launches tender offer for €500 million 2 1/8% notes due 2020

By Sarah Lizee

Olympia, Wash., Nov. 25 – Tesco Corporate Treasury Services plc launched a cash tender offer for any and all of its €500 million 2 1/8% notes due 2020 and guaranteed by Tesco plc, according to a notice.

The company said the offer is being made to maintain a strong balance sheet.

The purchase price will equal the value of all remaining payments of principal and interest on the notes up to and including Aug. 12, 2020, the first call date of the notes, discounted to the settlement date, Dec. 4, at a discount rate equal to the purchase yield of negative 0.25%, minus accrued interest.

Based on the current settlement date, the purchase price will be 101.638. If the settlement date changes, the purchase price will be recalculated.

Holders will also receive accrued interest.

The offer is subject to a new financing condition. The company announced that it plans to price a new series of euro-denominated fixed rate notes under its £15 billion euro note program, subject to market conditions.

The company may give preference to those noteholders who, prior to allocation of the new notes, have validly tendered or have given a firm intention to the company or any dealer manager that they intend to tender their notes for purchase.

A noteholder who wishes to subscribe for new notes in addition to tendering its notes for purchase may be eligible to receive, at the discretion of the company, priority in the allocation of the new notes.

The offer will expire at 11 a.m. ET on Nov. 29.

Tender instructions will be irrevocable except in limited circumstances and must be submitted in respect of a minimum nominal amount of €100,000 and integral multiples of €1,000 onwards.

Banco Santander, SA – London Branch (+44 20 7756 6909, +44 20 7756, tommaso.grospietro@santanderCIB.co.uk or king.cheung@santanderCIB.co.uk), Barclays Bank plc (+44 20 3134 8515 or eu.lm@barclays.com), BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com) and SMBC Nikko Capital Markets Ltd. (+44 20 3527 7545 or LM.EMEA@smbcnikko-cm.com) are acting as dealer managers.

Lucid Issuer Services Ltd. (+44 20 7704 0880 or tesco@lucid-is.com) is acting as information and tender agent for the offer.

Tesco is a grocery and general merchandise retailer based in Welwyn Garden City, England.

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