Morton's tenders for $68.25 million of its 7½% notes

New York, Jan. 4 - Morton's Restaurant Group, Inc. said it has begun a cash tender offer for up to $68.25 million of its 7½% senior secured notes due 2010.

The New Hyde Park, N.Y., company is also soliciting consents to, among other things, eliminate substantially all of the restrictive covenants and certain events of default in the note indenture.

For each $1,000 principal amount at maturity of notes accepted for payment, Morton's will pay the sum of the present value on the expected payment date of $971.06 and the interest that would accrue from Jan. 1, the most recent interest payment date, to July 1, 2007. From that total will be subtracted accrued interest from Jan. 1 up to but excluding the expected payment date.

The present value will be determined using the yield to maturity of the 3 5/8% U.S. Treasury note due June 30, 2007 plus a fixed spread of 27 basis points.

The total includes a consent payment of $15.00 per $1,000 principal amount at maturity.

Only holders who tender with consents by 5 p.m. ET on Jan. 18 will receive the consent payment.

Morton's will also pay accrued interest up to but excluding the expected payment date.

The tender ends at 5 p.m. ET on Feb. 1.

If the offer is oversubscribed, notes will be accepted pro rata.

Pricing will be fixed at 10 a.m. ET on Jan. 18.

Holders cannot be tendered without consents and consents cannot be delivered without tendering.

The offer is subject to conditions including completion of Morton's planned initial public offering, closing of its proposed new senior revolving credit facility and the receipt of consents from holders of at least a majority of the notes.

The $68.25 million is 65% of the principal amount at maturity of the notes. Morton's said that if it completes the tender offer it then plans to redeem any notes not tendered up to 35% of the total principal amount at maturity.

Jefferies & Co., Inc. is dealer manager and solicitation agent (973 912-2888). CapitalBridge is the information agent (201 499-3500 or 877 746-3583).

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