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Supervalu buys back 75.7% of New Albertson's 7.25% HITS during tender offer
By Angela McDaniels
Seattle, Nov. 21 - Supervalu Inc. said holders tendered 34,783,323, or 75.7%, of the outstanding 7.25% Hybrid Income Term Security Units (HITS) held in the form of corporate units of its wholly owned subsidiary New Albertson's, Inc. during a tender offer that expired on Monday.
The company will pay $25.22 per corporate unit for a total of $877.2 million. Holders received the scheduled quarterly contract adjustment payment and interest payment, which together totaled $0.453 per unit, on Nov. 16.
New Albertson's is expected to delist the 11,187,568 corporate units that remain outstanding from the New York Stock Exchange following settlement of the tender offer, which Supervalu said will occur "promptly."
Each unit consists of a contract to purchase for $25 a fraction of a share of Supervalu's common stock on May 16, 2007 and a 2.5% ownership interest in one of the senior notes that is pledged to secure the holder's obligations under the purchase contract.
Supervalu is conducting the offer to reduce its amount of debt maturing in 2009 and avoid practical considerations and fees related to the remarketing process for the senior notes due 2009 associated with the corporate units, according to a company news release.
The company said it will fund the tender offer, which began on Oct. 23, with proceeds from its new $500 million issue of 7½% senior unsecured notes due 2014.
Merrill Lynch & Co. (888 654-8637 or collect 212 583-8206), Banc of America Securities LLC (800 654-1666 or collect 212 583-8206) and Credit Suisse Securities (USA) LLC (800 820-1653 or collect 212 325-2547) were the dealer managers for the tender offer. Innisfree M&A Inc. (877 800-5186) was the information agent, and U.S. Bank Trust NA was the tender agent.
Supervalu is a supermarket operator based in Eden Prairie, Minn.
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