Buck buys 99% of Dollar General's 8 5/8% notes at close of tender offer

By Laura Lutz

Des Moines, July 6 - Dollar General Corp. said Buck Acquisition Corp. completed a tender offer and consent solicitation for Dollar General's 8 5/8% notes due 2010.

Buck accepted tenders for about 99% of the $200 million notes that were previously outstanding.

The offer expired at 5 p.m. ET on July 5. The consent solicitation expired at 5 p.m. ET on June 15.

For each $1,000 principal amount of notes tendered by the consent deadline, Buck will pay $1,087.72. In its July 6, release, Dollar General said it expected payment for the notes to be made later that day.

The payout is based on the present value on the payment date of future principal and interest payments discounted using 50 basis points over the bid-side yield to maturity of the 3.625% U.S. Treasury note due June 15, 2010 minus accrued interest up to but excluding the initial settlement date.

Buck will also pay accrued interest up to but excluding the settlement date.

The total includes a $30.00 per $1,000 principal amount consent payment for notes tendered by the consent deadline. Notes tendered after the consent deadline will not receive the consent payment.

On June 26, the expiration date was moved back from June 29. The pricing date was also rescheduled to July 2 at that time.

Buck Acquisition is indirectly controlled by investment funds affiliated with Kohlberg Kravis Roberts & Co. LP. The tender was conducted in connection with Buck's planned acquisition of Dollar General, which closed on July 6.

Buck is soliciting consents to amend the notes to eliminate most of the restrictive covenants and some other provisions.

Buck needed consents from holders of a majority of the notes.

The tender was subject to conditions including the receipt of enough consents to amend the notes, the satisfaction of all conditions to the acquisition and the receipt by Buck of proceeds from financing transactions.

Goldman, Sachs & Co. is dealer manager and solicitation agent (call collect 212 902-9077 or 800 828-3182). The information agent is D.F. King & Co., Inc. (banks and brokers call 212 269-5550, others 800 488-8095).

Dollar General is a Goodlettsville, Tenn.-based discount retailer.

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