Vulcan Materials buys back $506.37 million 6½%, 6.4% notes in offer

By Susanna Moon

Chicago, March 10 - Vulcan Materials Co. said it lifted the tender offer cap to $506,366,000 for its 6½% senior notes due 2016, 6.4% senior notes due 2017 and 7% senior notes due 2018.

The tender offer ended at 5 p.m. ET on March 7, with settlement set for March 10. The company previously planned to purchase up to $500 million of the notes.

The company has received $400,000 more 6½% notes, $1.2 million more 6.4% notes and none of the 7% notes since 5 p.m. ET on Feb. 7, the early tender date, according to a company press release.

Tendered notes could no longer be withdrawn after the early tender date.

The company said it received tenders for $433.4 million of the 6½% notes, $130.1 million of the 6.4% notes and $224.9 million of the 7% notes by the early tender deadline.

At 5 p.m. ET on Feb. 28, investors had tendered $433,746,000 of the 6½% notes, $130,522,000 of the 6.4% notes and $224,864,000 of the 7% notes.

Because the offer was oversubscribed for the 6½% notes and the tender offer, the company accepted the 6½% notes for purchase on a prorated basis up the tender cap, at a rate of about 86.6%, and the 6.4% notes in an amount so that, when added to the 6½% notes, the total purchase amount is equal to the offer cap, the press release noted.

No 7% notes will be purchased in the offer.

As previously announced, the company began a tender offer on Jan. 23 for up to $500 million principal amount of the three series of notes, each with a tender sub-cap, related to the sale of some assets in Florida.

The tender offer was not conditioned on any minimum amount of notes being tendered but is subject to completion of the Florida assets sale, with proceeds to be used to fund the offer.

Vulcan said on Feb. 10 that it lifted the tender cap for the 6½% notes and left the other tender sub-caps as well as overall offer cap unchanged in the oversubscribed offers.

The company was tendering for up to $375 million, raised from $350 million, of its $500 million outstanding 6½% notes; $175 million of its $350 million 6.4% notes; and $125 million of its $400 million 7% notes. The notes are listed in order of priority acceptance level.

The total purchase price for each $1,000 principal amount will be $1,140 for the 6½% notes, $1,147.50 for the 6.4% notes and $1,165 for the 7% notes.

The total payment includes an early tender premium of $30.00 per $1,000 of notes tendered by the early tender date.

The company also will pay accrued interest to but excluding the settlement date.

Wells Fargo Securities (866 309-6316 or 704 410-4760 collect), US Bancorp (877 558-2607 or 612 336-7604 collect) and Goldman Sachs & Co. (800 828-3182 or 212 902-5128 collect) were the joint dealer managers. BofA Merrill Lynch and SunTrust Robinson Humphrey Inc. are the co-dealer managers. D.F. King & Co. (800 967-5079) is the tender agent and the information agent.

Vulcan entered into a definitive agreement to sell the assets to Cementos Argos for $720 million, according to a previous press release. Vulcan is retaining all of its aggregates operations in Florida. As part of the transaction, the company has entered into a supply agreement to continue to provide aggregates to the divested concrete facilities, at market prices, for a period of 20 years. The deal is expected to close in the first quarter of 2014.

The Birmingham, Ala., company produces construction aggregates, primarily crushed stone, sand and gravel.

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