Saks accepts $585.7 million notes in tender

New York, July 19 - Saks Inc. said that it has accepted $585.7 million of its senior notes under its tender offer.

The tender offer expired at midnight ET on July 18.

Saks will buy $185.377 million or 74.15% of its $150 million 7½% notes due 2010, $202.399 million or 97.26% of its $208.105 million of 7% notes due 2013 and $197.896 million or 98.95% of its $200 million of 7 3/8% notes due 2019.

Those figures are up from $141.969 million, $193.509 million and $197.794 million, respectively, reported as of July 1.

At its previous announcement on July 5, Saks said it had received a waiver of defaults and consents to proposed amendments to its senior notes and senior convertible notes.

By the consent deadline of 5 p.m. ET on July 1, holders of a majority of the outstanding principal amount of its senior notes and senior convertible notes had approved the waiver and amendments, which include the waiver of defaults that were subject to a notice received from a hedge fund which said it owned more than 25% of the 2% convertible senior notes due 2024.

In addition to the notes tendered, consents were received for 59% of the $200 million of 2% convertibles, 97% of the $141.557 million 9 7/8% senior notes due 2011 and 87% of the $190.324 million 8¼% senior notes due 2008.

Saks said on July 5 that it has entered into supplemental indentures that put the changes into effect. The waivers have also become effective.

At its previous announcement on June 24, Saks increased pricing in the tender.

As increased, Saks was offering par for its $250 million of 7½% notes due 2010, $208.105 million of 7% notes due 2013 and $200 million of 7 3/8% notes due 2019, up from $990 per $1,000 previously.

The total price for each series of notes continues to include a consent payment of $20 per $1,000 that will only be paid to holders who tendered by 5 p.m. ET on July 1.

Saks announced the offer June 20 and also began a consent solicitation for two further series of notes and an issue of convertible notes. In total, $1.22 billion of debt is covered by the consent solicitations.

The consent solicitation-only portion covers Saks' $230 million of 2% convertible senior notes due 2024, $141.557 million of 9 7/8% notes due 2011 and $190.234 million of 8¼% notes due 2008.

The consent fee is $1 per $1,000 principal amount. The deadline was also 5 p.m. ET on July 1.

Under the consent solicitations, the Birmingham, Ala., department store operator was asking investors to waive any defaults arising from its failure to file required reports with the Securities and Exchange Commission until 5:30 p.m. ET on Oct. 31.

The solicitation also rescinds the notice of default received June 14 from a hedge fund that says it owns 25% of Saks' 2% convertibles.

The tenders for each series of notes were subject to the company receiving consents from holders of a majority of notes in that series and the closing of previously announced asset sales. Holders who tender will be considered to have given consents and to have waived defaults.

The amendments and waivers require the receipt of consents from holders of a majority of the notes in each series.

Citigroup Global Markets Inc. (800 558-3745), Goldman, Sachs & Co. (800 828-3182), Banc of America Securities LLC (888 292-0070) and Wachovia Securities (866 309-6316) are dealer managers. Global Bondholder Services Corp. is the information agent (banks and brokers call 212 430-3774, others 866 470-3900).

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