Avnet buys $273.4 million of 7 7/8% notes in tender

New York, March 30 - Avnet Inc. (Ba2/BBB-) said it purchased $273.4 million of its outstanding 7 7/8% notes due 2005 under the company's previously announced cash tender offer for all of the notes, which expired as scheduled at midnight ET on March 26 without extension.

Avnet funded the purchase from a portion of the proceeds of its recent sale of $300 million of convertible bonds, where was completed on March 8.

The company said that it will record a charge in its third fiscal quarter ending April 3 of some $16.4 million pre-tax and $11.3 million after-tax, or 9 cents per share, for the premium paid to holders who tendered their notes and other expenses associated with the transaction.

Avnet estimates that the note purchase will likely save the company about $5.5 million pre-tax (3 cents a share), on interest expenses.

As previously announced, Avnet, a Phoenix-based distributor of computer equipment and other electronic components, said on March 1 that it was tendering for any and all of its $360 million of outstanding 7 7/8% notes.

It set an expiration deadline of midnight ET on March 26, subject to possible extension.

Avnet, said it would purchase any and all validly tendered 7 7/8% notes at a price of $1,055 per $1,000 principal amount, plus accrued and unpaid interest up to, but not including, the day of payment for the notes. Avnet said it expected to make payment for all validly tendered notes promptly following the expiration of the tender offer and said that tenders of the notes could be withdrawn at any time prior to the expiration of the tender offer.

The company said the tender offer would be conditioned upon, among other things, the completion of a separately announced offering of $270 million face amount of convertible senior debentures due 2034, with Avnet seeking total net proceeds of at least $262 million (Avnet eventually sold $300 million of new 2% convertibles, including the over-allotment exercised by the underwriters).

Banc of America Securities LLC was the dealer-manager for the tender offer (contact the Liability Management Group at either 704 387-1004 or 866 475-9886). The information agent and depositary for the tender offer was Global Bondholder Services Corp. (call 866 470-3700).

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