ShopKo ups payment in tender for $100 million 9¼% notes, extends deadline

New York, Aug. 11 - ShopKo Stores, Inc. said it has increased the payment in its tender offer for any and all of its outstanding $100 million of 9¼% senior notes due 2022.

The company also pushed back all the deadlines.

Holders who tender by the consent deadline will receive $1,195.00 per $1,000 principal amount, up from the original $1,081.86 per $1,000 principal amount. The figure continues to include a consent payment of $50.00 per $1,000 principal amount.

After the consent deadline, the payment on offer is $1,145.00 per $1,000 principal amount, up from the original $1,031.86 per $1,000 principal amount.

As before, the company will also pay accrued interest up to but not including the redemption date.

The consent deadline is now 5 p.m. ET on Aug. 15 instead of 5 p.m. ET on July 14 and the expiration is now 5 p.m. ET on Aug. 24 instead of 5 p.m. ET on Aug. 10, itself extended several times from the original Aug. 3.

ShopKo said on Aug. 8 that as of midnight ET on Aug. 5, under the old terms of the offer, holders had tendered $9.3 million of the notes.

As previously announced on July 1, the offer is in connection with the already announced acquisition of ShopKo by Badger Retail Holding, Inc. and Badger Acquisition Corp., which are affiliates of Minneapolis-based private equity firm Goldner Hawn Johnson & Morrison Inc.

A valid tender will be considered a consent to proposed amendments to the indenture governing the notes, which will eliminate substantially all of the restrictive covenants and certain events of default.

This offer is conditioned upon the completed merger, a majority of the notes being tendered, execution of a supplemental indenture and the absence of any material adverse change with respect to ShopKo or the financial markets.

The tender offer, though, is not a condition of the merger. Badger Retail Holding has obtained sufficient financing commitments, which include borrowings of up to $700 million under either a mortgage facility or a secured term loan facility.

Global Bondholder Services Corp. is the information agent (866 736-2200 or call collect 212 430-3774). Banc of America Securities LLC (888 292-0070 or call collect 212 847-5834) and Morgan Stanley & Co. Inc. are dealer managers.

ShopKo Stores is a retailer of quality goods and services with headquarters in Green Bay, Wis.

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