Jack Cooper seeks tenders for 12¾% notes, series B preferreds

By Toni Weeks

San Luis Obispo, Calif., June 3 - Jack Cooper Holdings Corp. announced in separate press releases that it has launched a tender offer for any and all of its outstanding 12¾% senior secured notes due 2015 and its outstanding shares of series B non-convertible preferred stock.

The company is also soliciting consents for the notes and the preferreds.

12¾% notes due 2015

For each $1,000 principal amount of notes, the company will pay $1,071.25, including a consent payment of $30.00, for notes tendered by 5 p.m. ET on June 14. This date is also the withdrawal deadline for consents. Holders who tender after the withdrawal deadline but before the expiration date, 11:59 p.m. ET on June 28, will receive the base consideration of $1,041.25 per $1,000 of notes.

Holders will also receive accrued interest from the last interest payment date up to but not including the applicable payment date for the notes.

The company is soliciting consents to a single proposal that would eliminate most of the restrictive covenants and some events of default for the notes and release all of the liens of the collateral agent over the collateral securing their notes.

Holders who tender their notes are required to consent to the proposal, and holders who give consents will be required to tender their notes.

The tender offer is contingent on the proceeds of at least $225 million from a planned debt financing, consents representing at least 66 2/3% principal amount of notes, the execution and delivery of a supplemental indenture giving effect to the proposed amendments and the lien release and other general conditions.

Jack Cooper said following settlement for the tendered notes, which will occur promptly following the expiration date, it plans to redeem any and all notes that remain outstanding.

Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 829-6551 or 212 269-5550) is the depositary and information agent.

Series B preferred stock

The company is also offering to purchase all outstanding shares of its series B preferred stock and is concurrently soliciting consents, in lieu of a special stockholders meeting, to a single proposal that will authorize certain proposed amendments.

The offer expires at 11:59 p.m. ET on June 28.

The proposed amendments would alter the certificate of designations dated May 5, 2011 governing the stock to eliminate

• Voting rights relating to affiliate transactions, the issuance of senior securities and the issuance of parity securities and dividend default voting, including voting after a redemption failure;

• All rights relating to board appointments and observers;

• The requirement that at least $15 million of the original purchase price of the series B preferreds remain outstanding after a partial redemption;

• All rights to force a sale of the company following a redemption failure; and

• Section 6.4 of the securities purchase agreement dated April 21, 2011 providing that holders of the preferreds will receive annual, quarterly and current reports in the form required to be delivered to holders of certain new notes to be issued by the company in accordance with the indenture governing those notes.

The total consideration will be (a) 120% of the original purchase price plus (b) 120% of accrued interest from June 30 through the payment date plus (c) an amount equal to the daily dividend accrual multiplied by 28, which is the difference between the minimum number of days' notice that would be given for repurchase of series B preferreds if the tender offer were not made or shares were not tendered. The company will also pay a consent payment of $0.05 per share for a total consideration of $121.87 for each validly tendered share.

Holders who tender their shares will be required to consent to the proposed amendments and vice versa.

Settlement will occur promptly following the expiration date.

The company said it may repurchase or redeem any and all shares that remain outstanding after the tender offer at prices more or less than those paid in the offer.

The tender offer and consent solicitation are contingent on proceeds of at least $225 million from the company's planned debt financing, consents representing at least 50.1% of shares, approval by the board and by class A common stockholders, the filing of a certificate of amendment to the certificate of designations with the Secretary of State of Delaware and other general conditions.

Wells Fargo is the dealer manager and solicitation agent. Paul Hastings LLP (404 815-2276) is the depositary and information agent.

The company said that it plans to use the proceeds of its proposed debt financing, along with borrowings under its amended and restated revolving credit facility, to fund the tender offer and consent solicitations as well as repay other debt and redeem preferred stock.

Jack Cooper Holdings is a Kansas City, Mo.-based vehicle transportation services company.

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