Wesco tenders, seeks consents for Anixter notes due 2023, 2025

By Marisa Wong

Los Angeles, April 30 – Wesco International, Inc. announced that wholly owned subsidiary Wesco Distribution, Inc. has launched offers to purchase for cash any and all of Anixter Inc.’s outstanding $350 million 5½% senior notes due 2023 (Cusip: 035287AG6) and $250 million 6% senior notes due 2025 (Cusip: 035287AJ0).

Wesco is conducting the offers in connection with its acquisition of Anixter International Inc.

In connection with the offers, Wesco is soliciting consents with respect to each series of notes to amend the applicable indenture governing the notes.

Specifically, Wesco is seeking to amend the indentures to eliminate substantially all of the restrictive covenants, eliminate some events of default and eliminate any requirement to make a change-of-control offer.

Concurrently, Anixter is soliciting consents with respect to the indenture for each series of notes to amend the definition of change of control to exclude the merger with Wesco and related transactions and to expressly permit a merger between parent company Anixter International and Anixter in which Anixter survives.

With respect to notes of any series, a holder may participate in either the offer made by Wesco, in which case that holder would be delivering consents under Wesco’s consent solicitation, or the consent solicitation made by Anixter, but not both.

Wesco offers

Each of the offers is scheduled to expire at 11:59 p.m. ET on May 28.

Notes tendered in any offer may be withdrawn at any time prior to 5 p.m. ET on May 13.

Holders who tender their notes at or prior to the early tender deadline, 5 p.m. ET on May 13, and accepted for purchase will be eligible to receive the total consideration of $1,012.50 per $1,000 principal amount of notes. The total consideration includes an early tender payment of $50.00 per $1,000 of notes accepted for purchase.

Holders tendering after the early tender deadline will only be eligible to receive the tender consideration of $962.50 per $1,000 principal amount.

Wesco will also pay accrued interest to but excluding the settlement date of the offers.

Among other things, each offer is conditioned on the substantially concurrent or prior closing of the Wesco and Anixter merger.

The transaction is expected to be completed in the second or third calendar quarter of 2020. However, the merger agreement provides for the outside date to be automatically extended to as late as Jan. 11, 2021 under certain circumstances, and the parties could mutually agree to extend the outside date beyond that date.

Wesco said it intends to extend the expiration time with respect to each offer, without extending the withdrawal deadline, to have the payment date coincide with the closing of the merger.

As a result, any holder who tenders notes may not receive payment of the applicable offer consideration and may be unable to withdraw or trade its notes for a substantial duration.

Anixter solicitations

The Anixter consent solicitations are set to expire at 5 p.m. ET on May 13. Consents may be revoked at or prior to that time.

Holders who deliver their consents by the deadline will be eligible to receive the consent solicitation payment of $2.50 per $1,000 principal amount of notes.

Approval of Anixter’s change-of-control proposed amendments with respect to a series of notes requires consents from holders of a majority of the aggregate principal amount outstanding of that series.

If that condition is satisfied for a series of notes, Anixter will enter into a supplemental indenture effecting the proposed change-of-control amendments.

If, as of the consent solicitation deadline, Anixter does not receive the required consents to approve the change-of-control amendments with respect to a series of notes, without counting any change-of-control consents received under the Wesco offer, then consents delivered for notes tendered under the Wesco offer will be combined with the consents under the Anixter consent solicitation to determine whether the consent threshold has been met.

If, in this case, the threshold is met for a series of notes, then Wesco will pay holders the applicable consideration. If a holder receives the tender offer consideration or total consideration with respect to any notes held, then that holder will not receive the consent solicitation payment for those notes.

If, prior to the expiration time, the change-of-control consent threshold has been met with respect to any series of notes solely under the Anixter consent solicitation and the change-of-control supplemental indenture has been executed for that series of notes, then Wesco expects to terminate its offer for that series of notes promptly after execution of the supplemental indenture.

In that case, Wesco will not accept for purchase or pay the total consideration or tender offer consideration for any notes tendered with respect to that series. Holders will instead be eligible to receive from Wesco the change-of-control consent payment.

Among other things, payment of the consent solicitation fee is conditioned on the merger being completed at or prior to the later of 5 p.m. ET on April 1, 2021 or the outside date.

Holders who receive the consent solicitation payment will not be entitled to any accrued interest, Wesco noted.

Barclays (212 528-7581 or 800 438-3242) is the dealer manager and solicitation agent for the offers and Anixter consent solicitations.

D.F. King & Co., Inc. (212 269-5550 for brokers and banks or 877 361-7966 for all others, anixter@dfking.com) is the tender agent and information agent.

Wesco is a Pittsburgh-based provider of electrical, industrial and communications maintenance, repair and operating (MRO) and original equipment manufacturer (OEM) products, construction materials and advanced supply chain management and logistic services.

Anixter is a Glenview, Ill.-based company that supplies communications and security products.

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