Sealy Mattress tenders for 9 7/8% and 10 7/8% notes

New York, March 8 - Sealy Mattress Co. (B3) said that it has begun a cash tender offer for all $300 million outstanding principal amount of its 9 7/8% senior subordinated notes due 2007 and all $128 million outstanding principal amount of its 10 7/8% senior subordinated discount notes due 2007.

The company also said that it was soliciting the consent of the noteholders to proposed changes in the notes' respective indentures, aimed at eliminating substantially all of the restrictive covenants and certain events of default and other terms.

The company set a consent deadline of 5 p.m. ET on March 18 and said that the tender offers, which began on March 5, will expire at 12 a.m. ET on April 1, with all deadlines subject to possible extension.

Sealy, a Trinity, N.C., bedding manufacturer, said that holders tendering their notes by the consent deadline and thus consenting to the proposed changes, would receive total consideration of $1,035.42 per $1,000 principal amount of 9 7/8% notes tendered and total consideration of $1,038.75 per $1,000 principal amount of 10 7/8% notes tendered. Total consideration includes a $2.50 per $1,000 principal amount consent payment in each case. The tender offer price (to be paid to holders tendering their notes after the consent deadline but before the offer expiration) will be $1,032.92 per $1,000 principal amount of 9 7/8% notes tendered, and $1,036.25 per $1,000 principal amount of 10 7/8% notes tendered, but those holders will not receive the consent payment.

Holders validly tendering notes will be deemed to have delivered consent to the amendments to the related indenture. A holder may not consent to the amendments without also tendering its notes and may not revoke its consent without also withdrawing the previously tendered notes to which the consent relates.

The tender offers and the consent solicitations are being made in connection with the pending merger of Sealy's corporate parent, Sealy Corp., with an affiliate of Kohlberg Kravis Roberts & Co., contemplated offerings of new senior subordinated notes of Sealy, and a refinancing under which Sealy expects to repay its existing debt and enter into a new senior credit agreement.

The tender offers and the consent solicitations are subject to the satisfaction of certain conditions, which include the consummation of the related financing and merger transactions.

Goldman, Sachs & Co. (call 800 828-3182) and J.P. Morgan Securities Inc. (call 212 270-4991) will act as the dealer managers in connection with the tender offers and as the solicitation agents in connection with the consent solicitations. Global Bondholder Services Corp. is the information agent (call 866 873-6300).

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