Saks begins modified Dutch auction tender offer for its 8¼% notes

By Angela McDaniels

Seattle, March 14 - Saks Inc. has begun a modified Dutch auction tender offer to purchase up to $100 million of its $190.324 million outstanding 8¼% notes due Nov. 15, 2008, according to a company news release.

The offer will expire at midnight ET on April 11.

The tender consideration will be determined at 2 p.m. ET on April 9 and will result in a yield to maturity equal to the sum of the yield to maturity of the 3 3/8% U.S. Treasury note due Nov. 15, 2008 plus a spread specified by the noteholders that must be at least 50 basis points and no more than 100 bps, minus accrued interest up to but excluding the purchase date.

Saks said it will accept tendered notes in the order of highest to lowest spreads and will select the single highest spread - the clearing spread - that will allow the company to purchase no more than $100 million of the notes. The company will pay the same purchase price for all notes tendered at or above the clearing spread.

Noteholders will also receive accrued interest up to but excluding the payment date.

The offer is not conditioned upon a minimum amount of notes being tendered.

Citigroup Corporate and Investment Banking (800 558-3745) and Goldman, Sachs & Co. (800 828-3182 or call collect 212 902-9077) are dealer managers for the offer, and Global Bondholder Services Corp. (call collect 212 430-3774 or 866 795-2200) is depositary and information agent.

Saks is a department store operator based in Birmingham, Ala.

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