Levi Strauss buys $372 million 7% notes in tender

New York, Jan. 13 - Levi Strauss & Co. said it completed its tender offer for its 7% notes due 2006, buying $372.143 million, or 83% of the securities.

The offer ended at midnight ET on Jan. 12.

At the previous announcement on Jan. 10, Levi Strauss set pricing in the tender offer at $1,052.23 per $1,000 principal amount, including a $20 early tender premium payable to all holders who tender by the expiration date of midnight ET on Jan. 12.

As of Jan. 10, holders had tendered $366.746 million of the $450 million principal amount of notes.

At its previous announcement on Dec. 31, Levi Strauss extended the early tender deadline to midnight ET on Jan. 12 from 5 p.m. ET on Dec. 29, effectively resulting in tendering holders receiving the maximum payment, regardless of when they tender.

All other terms are unchanged and tendered notes may no longer be withdrawn.

On Dec. 17, Levi Strauss said it had increased the size of its previously announced tender offer for its 7% notes to $450 million - the amount of the notes currently outstanding - from $375 million.

Levi Strauss, a San Francisco-based apparel maker, announced on Dec. 15 that it had begun a cash tender offer for up to $375 million of the 7% notes (an amount that has now been raised), out of the $450 million principal amount of the notes outstanding.

It set an early tender deadline of 5 p.m. ET on Dec. 29 and an expiration deadline of midnight ET on Jan. 12, with both deadlines subject to possible extension.

Levi said it would purchase the notes for a total consideration based on a 75 basis point fixed spread over the yield to maturity of the reference security, the 2½% U.S. Treasury note due Oct. 31, 2006. The total consideration would include an early tender premium of $20 per $1,000 principal amount, payable to holders tendering by the early tender deadline. All tendering holders will receive accrued interest up to but excluding the settlement date of the offer.

Levi initially said that if the total number of validly tendered notes were to exceed $375 million it would accept notes for purchase on a pro-rata basis based on the principal amount of notes tendered (the subsequent increase in the tender offer size eliminates this condition).

The company initially said it planned to enter into a secured or other financing in 2005 that would provide proceeds sufficient to enable it to repurchase or otherwise refinance the remaining $75 million principal amount of the 2006 notes (this was superseded by the increase in the tender offer size).

Levi said that the tender offer would be subject to certain conditions, including the consummation by the company before the tender offer expired of an offering of notes in a capital markets transaction with gross proceeds of at least $375 million (Levi on Dec. 15 separately announced plans for a $375 million offering of new 10-year notes; on Dec. 16, Levi announced that it had successfully priced an upsized $450 million offering of new 9¾% senior notes due 2015).

Citigroup Global Markets Inc. is the dealer manager for the tender offer (call 212 723-6106 or 800 558-3745). Georgeson Shareholder Communications Inc. is the information agent (call 212 440-9800 or 877 868-4958).

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