Chattem solicits consents for 7% notes

New York, June 26 - Chattem, Inc. said it has begun soliciting consents from holders of its $107.5 million of 7% senior subordinated notes due 2014.

Investors are being asked to permit an $85 million increase in the company's capacity to make restricted payments, including repurchasing common stock.

Chattem needs consents from holders of a majority of the notes to make the change.

Those who give consents will receive a fee of $15.00 per $1,000 principal amount.

The solicitation ends at 5 p.m. ET on July 14 unless extended.

Chattem, a Chattanooga, Tenn., maker of consumer products, said its directors have authorized the repurchase of up to an additional $100 million of its common stock under the repurchase program.

Question can be direct to Wachovia Securities (liability management group at 704 715-8341 or 866 309-6316). Global Bondholder Services Corp. is information agent (212 430-3774).

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