Sotheby's starts tender offer for portion of 7.75% notes due 2015

By Marisa Wong

Madison, Wis., Nov. 22 - Sotheby's said it began a modified Dutch auction tender offer for up to $50 million of its $128.25 million outstanding 7.75% senior notes due 2015.

The offer will expire at 11:59 p.m. ET on Dec. 20.

Holders who tender their notes on or before 5 p.m. ET on Dec. 6, the early tender date, will receive the total consideration, which will be equal to the clearing price and includes a $30 early tender payment per $1,000 principal amount of notes.

Holders who tender their notes after the early tender date and before the expiration date will receive the tender offer consideration, which is the total consideration less the early tender payment.

For each $1,000 of notes, the company is setting the acceptable bid range at $1,050 to $1,100. Bids must be made in increments of $2.50.

Only tenders of notes for which a price is specified within the acceptable bid range will be accepted for purchase and used for the purpose of determining the clearing price.

Holders who do not specify a price will be deemed to have specified a price equal to the minimum bid price.

Sotheby's will accept tendered notes in the order of the lowest to the highest bid prices. It will select the single lowest price for all tenders as the clearing price, such that for all tenders with a bid price equal to or less than the clearing price, Sotheby's will be able to purchase the principal amount of notes equal to the tender cap. If notes in a principal amount less than the tender cap are tendered, Sotheby's will be able to purchase all notes tendered, and the clearing price will be the highest bid price.

If the principal amount of the notes tendered at or below the clearing price exceeds the tender cap, Sotheby's will accept for purchase notes tendered at prices below the clearing price first and then notes tendered at the clearing price on a prorated basis.

All notes not accepted as a result of proration and all notes tendered at prices in excess of the clearing price will be returned to holders.

Sotheby's will also pay accrued interest up to but excluding the settlement date, which is expected to be promptly after the expiration date.

Goldman Sachs & Co. (800 828-3182 or 212 357-4692) is dealer manager of the tender offer, and Global Bondholder Services Corp. (866 937-2200 or 212 430-3774) is the depositary and information agent.

Sotheby's is a New York-based art auction, private sales and art-related finance company with principal salesrooms in New York, London, Hong Kong and Paris.

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