Pactiv begins cash change-of-control offer for 5 7/8% notes due 2012

By Susanna Moon

Chicago, Oct. 20 - Pactiv Corp. said it began on offer to purchase for cash its outstanding 5 7/8% notes due 2012 at 101 plus accrued interest to but not including the payment date.

Under the note terms, Pactiv is required to make an offer to purchase the notes following a change of control, which will occur after the pending merger with Reynolds Group Holdings Ltd.

The change-of-control offer will end at midnight ET on Nov. 20.

The shareholders meeting to approve the merger agreement will be held on Nov. 15.

Pactiv expects to complete the merger promptly after obtaining stockholder approval at the meeting, according to a company press release.

The company noted that Standard & Poor's Rating Services and Moody's Investor Services have said that upon completion of the merger, each agency may downgrade the ratings of the notes, thereby triggering a rating event.

The company said on Oct. 19 that it canceled its tender offer for its $250 million in 5 7/8% notes due July 15, 2012 and that it would promptly begin a change-of-control offer for the notes.

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

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