TEMPLE-INLAND INC. (TIN) said Friday (Sept. 28) that it would acquire all of the outstanding junk bond debt of GAYLORD CONTAINER CORP. (GCR), as part of its $786 million acquisition of the Deerfield, Ill.-based packaging materials maker. Austin, Tex.-based Temple-Inland, also a maker of packaging, said it would begin cross-conditional tender offers for Gaylord's outstanding 9.375% senior notes due 2007, its 9.75% senior notes due 2007 and its 9.875% senior subordinated notes due 2008. Temple-Inland will also tender for all of Gaylord's outstanding shares, and said certain outstanding bank debt and other senior secured debt obligations of Gaylord will be paid or otherwise satisfied. The $786 million figure assumes that all shares and all notes are tendered, and is broken down into approximately $100 million to purchase all of the shares at $1.80 per share, and approximately $686 million to acquire all the notes and to satisfy the bank debt and other senior secured debt obligations. The equity and debt tender offers are scheduled to expire on Oct. 26, subject to possible extension; Temple-Inland, which is also seeking the consent of the Gaylord noteholders to amending the notes' indentures to remove certain restrictive covenant and other Gaylord contractual obligations, set midnight ET on Oct. 12 as the consent payment deadline. Holders of the 9.375% senior notes and 9.75% senior notes, both due 2007, who tender by the deadline will receive total compensation of $755 per $1,000 principal amount, including a $20 per $1,000 consent payment. Holders of the 9.875% senior subordinated notes due 2008 are to receive total consideration of $260 per $1,000 principal amount, including the $20 consent payment.

The overall merger transaction between Temple-Inland and Gaylord is contingent upon Temple-Inland receiving at least 90% of the outstanding amount of each series of the notes, with those notes having been validly tendered and not withdrawn prior to the expiration of the offer. The merger deal is also contingent upon, among other things, Temple-Inland getting at least two-thirds of the outstanding Gaylord shares, as well as regulatory approval and the satisfaction or waiver of customary closing conditions. This transaction is not conditioned upon financing, since Temple-Inland has received a financing commitment from Citibank, N.A. to fund its offer for all outstanding GCR shares and the notes, as well as to satisfy the bank debt and other senior secured debt obligations, and pay costs and expenses associated with the transaction. Gaylord's Board of Directors has unanimously recommended that its shareholders accept the Temple-Inland offer and tender their shares. Deutsche Banc Alex. Brown and Rothschild Inc., acted as financial advisors to Gaylord. Salomon Smith Barney Inc. will act as dealer/manager for Temple-Inland in connection with the tender offer for the notes. D. F. King & Co., Inc. is the information agent.

OXFORD PROPERTIES GROUP INC. said Sept. 27 that its board of directors had recommended to the holders of its of 5.75% convertible debentures due 2007 that they accept a previously announced purchase offer for the debentures made by BPC Properties Ltd. AS PREVIOUSLY ANNOUNCED, BPC, a related company of Ontario Municpal Employees Retirement System, said on Sept. 24 that it had made a bid to acquire the $100 million of outstanding debentures at a cash price of $1,130 per $1,000 principal amount, plus accrued and unpaid interest up to the date the convertible debentures are taken up under the offer, for a total transaction value of $113 million, plus interest. The offer is scheduled to expire at 1700 ET on Oct. 26. BPC said that it had entered into an agreement with the holders of approximately 70% of the debentures, who will tender their debentures. The offer is subject to customary conditions and to the satisfaction or waiver of all of the conditions under the $23.75 cash offer made by BPC on Sept. 10, 2001 for the common shares of Oxford, a Toronto-based commercial real estate firm. The offer for the Oxford common shares will not be affected by these developments. BPC said it currently owns 10,858,768 common shares of Oxford, representing approximately 17% of the outstanding Oxford common shares on a fully-diluted basis. BPC has also entered into a lock-up agreement pursuant to which the holders of 13,770,923 common shares (approximately 22% of the outstanding common shares on a fully-diluted basis) have agreed to tender their common shares to the common share offer.

UNIVERSAL HEALTH SERVICES, INC. (UHS) said Sept. 26 that it had called for redemption its $135 million of 8.75% senior notes due 2005. The King of Prussia, Pa.-based hospital operator said that the bonds will be redeemed on Oct. 9 at a redemption price of 101.132%.

FELCOR LODGING TRUST INC. (FCH) said in a Securities and Exchange Commission filing on Sept. 25 that in accordance with the requirements of the indenture governing the outstanding $600 million of 8.5% senior notes due 2011 issued by its FELCOR LODGING L.P. unit, the latter plans to redeem $300 million in principal amount of these notes. The Irving, Tex.-based lodging industry real estate investment trust said the redemption price will be at 101% of the principal amount, plus accrued interest. This redemption is required as a result of the termination of Felcor's merger with MeriStar Hospitality Corp. (MHX). The notes had been issued by FelCor Lodging LP on June 4, in anticipation of the merger. Since that time, FelCor OP has held $316 million of the net proceeds from the sale of the notes in a restricted proceeds account to fund this special redemption, the company said.

PG&E NATIONAL ENERGY GROUP said Sept. 24 that it had extended the expiration date of its previously announced offer to exchange $1 billion of outstanding 10.375% senior notes due 2011 for a like amount of new notes which have been registered for public trading. The offer had been scheduled to expire at 1700 ET on Sept. 24, but was extended to 1700 ET Oct. 1. The company cited the recent market closure. The original notes were issued in a private placement on May 22. PG&E National Energy Group is a Bethesda, Md.-based unregulated subsidiary of San Francisco-based PG&E Corp.(PCG), the parent of Pacific Gas & Electric Co., currently in Chapter 11, but stressed in its announcement that it is otherwise unrelated to PG&E. The company said that at the close of business on Sept. 21, $689.505 million of the original notes had been tendered for exchange. Wilmington Trust Co. is the exchange agent.

HOMEGOLD FINANCIAL INC. (HGFN) said Sept. 24 that it was extending its previously announced tender offer for its 10.75% senior notes due 2004 to 1700 ET Oct. 15, citing the closing of the financial markets following the Sept. 11 terrorist attacks. AS PREVIOUSLY ANNOUNCED, HomeGold, a Lexington, S.C.-based sub-prime mortgage company, said Sept. 10 that it had begun a "modified Dutch Auction" tender offer with for the outstanding 10.75% notes, to be financed from its working capital. HomeGold said it would purchase for cash up to 100% of its outstanding notes at a price between $350 and $550 per $1,000 principal amount plus accrued dividends. The exact price would be determined through the "modified Dutch auction" procedure: at the end of the tender offer, HomeGold will purchase such amount of notes, with the maximum purchase price of $550 per $1,000 principal amount, as would constitute at least a majority of the outstanding notes.

HomeGold will pay to all holders whose tenders are accepted the highest price specified for the notes accepted for purchase by HomeGold, even if that price is higher than the price specified by such holder. HomeGold has also agreed that if it purchases any notes, it will purchase all of the notes tendered at the minimum price of $350 per $1,000. If the principal amount of notes tendered at the purchase price exceeds a majority of the principal amount of the notes (and HomeGold elects not to purchase all such notes), all securities tendered at prices below the applicable purchase price will be accepted, and acceptances of tenders at the purchase price will be allocated among holders of the notes on a pro-rata basis according to the principal amount tendered. HomeGold said that in addition to the tender for notes it is soliciting consents to approve certain proposed indenture amendments which would eliminate or modify certain negative covenants and other provisions, generally relating to the incurrence of debt and other significant corporate transactions. HomeGold will pay $10.00 per each $1,000 principal amount as a consent payment. Consents may be delivered without tendering notes, but a tender of notes will be deemed to be a concurrent tender of the consent associated with such tendered notes. Completion of the tender offer is subject to certain conditions - which may be waived by HomeGold - including the tender of a majority of the outstanding notes at or below the maximum purchase price of $550 per $1,000 principal amount. The tender offer will expire at 1700 ET on Oct. 8, subject to possible extension. Tendered Notes (and Consents) may be withdrawn at any time prior to the expiration date of the tender offer. First Union Securities, Inc. is the dealer manager, MacKenzie Partners, Inc. is the information agent and Bankers Trust Corp. is the depositary for the tender offer.

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