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Select Medical tenders for 7½%, 9½% notes
New York, Jan. 20 - Select Medical Corp. said it has begun a cash tender offer for its $175 million principal amount of 7½% senior subordinated notes due 2013 and its $175 million principal amount of 9½% senior subordinated notes due 2009.
The Mechanicsburg, Pa., operator of specialty hospitals is also soliciting consents to amend the indentures of the notes to eliminate most of the principal restrictive covenants and amend certain other provisions.
The tenders are subject to conditions including completion of the acquisition of Select Medical by EGL Acquisition Corp., an affiliate of Welsh, Carson, Anderson & Stowe IX, LP. The merger is expected to close in February.
Select Medical is offering $1,134.23 per $1,000 principal amount for the 7½% notes and $1,066.56 per $1,000 principal amount for the 9½% notes. Both prices include a $20.00 per $1,000 principal amount consent payment that will only be paid to holders who tender by the consent deadline of 5 p.m. ET on Feb. 2.
Holders who tender after the consent deadline but before the expiration of 9 a.m. ET on Feb. 24 will receive $1,114.23 per $1,000 principal amount and $1,046.56 per $1,000 principal amount, respectively.
Holders who tender will be required to deliver consents and vice versa.
The amendments to the indentures require the consent of holders of at least a majority of each series of notes.
The tender has a minimum tender condition, a consent condition, a supplemental indenture condition and certain additional customary conditions.
Merrill Lynch & Co. is dealer manager and solicitation agent (888 ML4-TNDR or call collect 212 449-4914). The depositary is Computershare Trust Co. of New York. The information agent is Georgeson Shareholder Communications Inc. (877 278-3834 or call collect 212 440-9800).
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