Vulcan Materials extends tender for three series; offer oversubscribed

By Susanna Moon

Chicago, March 3 - Vulcan Materials Co. said it extended the tender offer for its 6½% senior notes due 2016, 6.4% senior notes due 2017 and 7% senior notes due 2018.

The tender offer will now end at 5 p.m. ET on March 7, with settlement set for March 10, according to a company press release.

Tendered notes may no longer be withdrawn as of 5 p.m. ET on Feb. 7, the early tender date.

As of 5 p.m. ET on Feb. 28, investors had tendered $433,746,000 of the 6½% notes, $130,522,000 of the 6.4% notes and $224,864,000 of the 7% notes.

That compares with tenders for $433.4 million of 6½% notes, $130.1 million of 6.4% notes and $224.9 million of 7% notes by 5 p.m. ET on Feb. 7, the early tender date.

Because the tender offer had been oversubscribed for the first-priority notes and the aggregate tender cap by the early tender deadline, the company previously said it expected to accept the 6½% notes on a prorated basis up to the sub-cap and to accept 6.4% notes on a prorated basis so that the aggregate principal amount of the accepted notes equals the tender cap and that no 7% notes would be accepted. That remains unchanged.

As previously announced, the company began a tender offer on Jan. 23 for up to $500 million principal amount of the three series of notes, each with a tender sub-cap, related to the sale of some assets in Florida.

The tender offer is not conditioned on any minimum amount of notes being tendered but is subject to completion of the Florida assets sale, with proceeds to be used to fund the offer.

Vulcan said on Feb. 10 that it lifted the tender cap for the 6½% notes and left the other tender sub-caps as well as overall offer cap unchanged in the oversubscribed offers.

The company is tendering for up to $375 million, raised from $350 million, of its $500 million outstanding 6½% notes; $175 million of its $350 million 6.4% notes; and $125 million of its $400 million 7% notes. The notes are listed in order of priority acceptance level.

The total purchase price for each $1,000 principal amount will be $1,140 for the 6½% notes, $1,147.50 for the 6.4% notes and $1,165 for the 7% notes.

The total payment includes an early tender premium of $30 per $1,000 of notes tendered by the early tender date.

The company also will pay accrued interest to but excluding the settlement date.

Wells Fargo Securities (866 309-6316 or 704 410-4760 collect), US Bancorp (877 558-2607 or 612 336-7604 collect) and Goldman Sachs & Co. (800 828-3182 or 212 902-5128 collect) are the joint dealer managers. BofA Merrill Lynch and SunTrust Robinson Humphrey Inc. are the co-dealer managers. D.F. King & Co. (800 967-5079) is the tender agent and the information agent.

Vulcan entered into a definitive agreement to sell the assets to Cementos Argos for $720 million, according to a previous press release. Vulcan is retaining all of its aggregates operations in Florida. As part of the transaction, the company has entered into a supply agreement to continue to provide aggregates to the divested concrete facilities, at market prices, for a period of 20 years. The deal is expected to close in the first quarter of 2014.

The Birmingham, Ala., company produces construction aggregates, primarily crushed stone, sand and gravel.

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