Fortune Brands sets pricing in up to $1.05 billion tender offers

By Jennifer Chiou

New York, Aug. 22 - Fortune Brands, Inc. announced the pricing terms of the tender offers for $2.5 billion of its notes that began on July 28.

The company previously increased the maximum purchase price of the offers to $1.05 billion from $1 billion.

For each $1,000 principal amount, the company is offering a total payment of:

• $1,149.56 for the 5.375% notes due 2016, for which it has received tenders for $657.11 million of its $950 million of notes;

• $1,367.30 for the 8.625% debentures due 2021, for which it has received tenders for $31.6 million of its $90,986,000 of notes;

• $1,311.45 for the 7.875% debentures due 2023, for which it has received tenders for $35,873,000 of its $150 million of notes;

• $1,082.03 for the 4.875% notes due 2013, for which it has received tenders for $117.39 million of its $300 million of notes; and

• $1,140.81 for the 6.375% notes due 2014, for which it has received tenders for $254,933,000 of its $500 million of notes.

Each total purchase price includes an early tender payment of $30.00 per $1,000 principal amount of notes tendered by the early tender date.

Due to Fortune's receipt of tenders for $1,244,553,000 of notes as of 5 p.m. ET on Aug. 10, the early tender date, it terminated the tender offers for its 6.625% debentures due 2028 and 5.875% notes due 2036. It had tallied early tenders for $41.15 million of the $200 million of 6.625% debentures as well as $106,497,000 of its $300 million of 5.875% notes due 2036.

As reported, the company will purchase no more than $550 million of the 5.375% notes due 2016. This cap was already increased from $500 million.

Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be Aug. 25.

Each offer will expire at 11:59 p.m. ET on Aug. 24.

As previously noted, the tender offers will be funded with up to $1 billion of the anticipated net proceeds from the sale of the company's Acushnet Co. golf business. Fortune Brands said it wants to reduce debt and further strengthen the capital structures of its beam business and its home and security business.

The tender offers are subject to various conditions that include the sale of the golf business.

The lead dealer managers are Barclays Capital Inc. (800 438-3242 or 212 528-7581) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811). The information agent and depositary is D.F. King & Co., Inc. (800 848-3416 or 212 269-5550).

Fortune Brands is a consumer brands company based in Deerfield, Ill.

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