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Sbarro accepts tenders for 86.2% of 11% notes due 2009
By Laura Lutz
Washington, Feb. 7 - Sbarro, Inc. accepted tenders and consents for $219.907 million, or 86.2%, of its $255 million of 11% senior notes due 2009 at the expiration of the company's tender offer for the notes.
The offer expired at midnight ET on Feb. 6. The company had received tenders from holders of $218.898 million of the notes by the consent deadline of 5 p.m. ET on Jan. 22.
The Melville, N.Y.-based restaurant operator was also soliciting consents to eliminate most of the restrictive covenants in the note indenture. The company needed consents from a majority of noteholders to amend the notes.
The tender was linked to a merger agreement, under which MidOcean SBR Holdings LLC, an affiliate of MidOcean Partners III, LP, will acquire Sbarro.
For each $1,000 principal amount of notes, the company said it will pay $1,020.83, plus accrued interest up to, but not including, the payment date.
Those who tendered on or prior to Jan. 22 will receive the $10.00 consent payment, which is already included in the payout.
The offer began on Jan. 9.
Sbarro said that it expects to enter into a new $150 million senior secured term loan facility and a new $25 million senior secured revolving facility linked to the acquisition. In addition, the company expects to raise $150 million through the issuance of new senior unsecured notes.
The company said it intends to use $300 million of the additional cash available from the facilities and offering to fund the tender.
Credit Suisse Securities (USA) LLC (800 820-1653 or call collect 212 325-7596) and Banc of America Securities LLC (888 292-0070 or call collect 704-388-9217) are the dealer managers and solicitation agents. D.F. King & Co., Inc. is the information agent (800 290-6426 or call collect 212 269-5550).
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