Status of Tasty Bondco/Telepizza €335 million 6¼% notes in question as KKR tender misses target

By Paul A. Harris

Portland, Ore., April 30 – The going forward status of the Tasty Bondco 1 SAU 6¼% senior secured notes due May 2026 came into question on Tuesday, as it appeared that an investor group led by KKR would fall short of the 50% threshold in its tender for shares of Spain's Telepizza, according to market sources.

The notes came at par in a €335 million issue last Friday.

The bonds, issued by Tasty Bondco, an investment vehicle managed by KKR, were to be used to refinance Telepizza’s debt.

However, in the event that KKR had not reached the common shares threshold of 50% plus one share by the Tuesday close, it appeared that the deal, which would have seen KKR become the majority owner of Telepizza following which KKR was expected to take the Madrid-based pizzeria chain private, would not go forward, sources said.

The bonds were wrapped around 101 late Tuesday London time, inferring that they might become subject to a special mandatory redemption, a sellside source said.

Telepizza's shares (BME: TPZ) closed Tuesday at €6.01, 1 cent above KKR's €6.00 per share tender offer.

Boosted bid not expected

The KKR €432 million offer for Telepizza came on Dec. 21, 2019, sources recounted.

The private equity group already owned 26.3% of the Telepizza shares.

KKR's €6.00 per share bid represented an approximately 33% premium to the Dec. 19 closing price, sources say.

In the short run, KKR, which initially set out to own at least 75% of the shares, saw its stake grow modestly.

However, early in the new year came assertions that the KKR bid undervalued the company.

Subsequent to the KKR bid, two hedge funds, Investment Emmanuel Boussard and Reade Eugene Griffith, significantly increased their stakes in Telepizza, a market source recounted.

As of late Monday, KKR's stake in Telepizza fell short of 47%, according to the source, who added that KKR is thought to be unlikely to boost its €6.00 per share offer, even at this advanced stage, with financing in place.

For one thing, to increase the bid might make it appear that the venture capital firm was malleable with respect to the tactics of holdout shareholders, the source said.

© 2015 Prospect News.
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