Harland Clarke begins tender offer for 6 5/8% notes issued by Valassis

By Angela McDaniels

Tacoma, Wash., Jan. 6 - Harland Clarke Holdings Corp. began a tender offer for the $258.9 million outstanding principal amount of 6 5/8% senior notes due 2021 issued by Valassis Communications, Inc., according to a company news release.

The offer is being conducted in connection with Harland Clarke's upcoming acquisition of Valassis.

Harland Clarke is also soliciting consents to amend the indenture governing the notes so that the acquisition does not count as a change of control and, accordingly, does not trigger the requirement to make an offer to purchase all of the notes.

Consents are needed from the holders of a majority of the outstanding notes in order to make the amendments. Notes will not be accepted for purchase unless they are accompanied by a consent.

Harland Clarke is offering $1,017.50 per $1,000 principal amount of notes. This payment includes a $30.00 early tender premium for each note tendered by the early tender date, 5 p.m. ET on Jan. 17.

Tendering holders will also receive accrued interest up to but excluding the settlement date.

The company currently expects that some financing transactions relating to the acquisition will be launched following the early tender date. The tender offer is being made at this time in order to help the company determine the principal amount of those financing transactions.

The tender offer is scheduled to expire at 11:59 p.m. ET on Feb. 3. The settlement date is expected to coincide with the closing of the acquisition, which will occur sometime in the first quarter.

The completion of the tender offer is conditioned on the substantially concurrent completion of the acquisition, the receipt of tenders for at least a majority of the outstanding notes and the execution of a supplemental indenture implementing the proposed amendments.

The consummation of the tender offer and consent solicitation is not a condition to the acquisition.

The lead dealer manager and lead solicitation agent is Credit Suisse Securities (USA) LLC (800 820-1653 or 212 538-2147). BofA Merrill Lynch and Citigroup Global Markets Inc. are the joint dealer managers. The tender agent and information agent is D.F. King and Co., Inc. (212 269-5550 collect, for banks and brokers only, or 800 488-8035).

Harland Clarke is a San Antonio-based provider of payment, marketing and security services. Valassis is a Livonia, Mich.-based provider of media solutions.

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