Wrigley outlines $5.7 billion credit facility for merger with Mars

By Sara Rosenberg

New York, May 27 - Wrigley Co. detailed its $5.7 billion senior secured credit facility that will be obtained in connection with the merger of Wm. Wrigley Jr. Co. and Mars Inc., according to a PREM14A filed with the Securities and Exchange Commission late Friday.

Goldman Sachs is the lead bank on the deal.

The facility consists of a $250 million revolver, a $1 billion term loan A and a $4.45 billion term loan B. Talk is that the term loan B is expected around Libor plus 400 basis points, a market source told Prospect News on Tuesday, adding that ratings are rumored in the four-Bs area.

Timing on the launch of the credit facility is still to be determined. "It could be after Labor Day. It could even be end of the year business," the source remarked.

Proceeds will be used to help fund the payment of the merger consideration, the repayment or refinancing of certain Wrigley debt and to provide for ongoing working capital and general corporate purposes.

As part of the merger, Mars received a separate debt commitment from JPMorgan, Bank of America, BNP Paribas, Citigroup, Deutsche Bank, Lloyds TSB Bank and RBS Securities that provides for a $12 billion senior unsecured credit facility.

The Mars facility, which is expected to be investment grade, consists of a $1.5 billion revolver, an $8.5 billion term loan and a $2 billion bridge loan. Rumor has it that the term loan is expected to be talked at around Libor plus 200 bps, the source added.

Proceeds from the Mars facility will be used to finance the equity contribution from Mars, the repayment or refinancing of certain Mars debt and for general corporate purposes.

Also, Berkshire Hathaway has agreed to provide $4.4 billion in subordinated debt financing to the surviving corporation in the merger and to invest $2.1 billion in equity securities.

Under the merger agreement, Mars will pay $80 cash for each share of Wrigley common stock and class B common stock in a transaction valued at about $23 billion.

Wrigley Co. will be operated as a separate, stand-alone subsidiary of Mars, keeping its headquarters in Chicago.

The transaction is expected to close later this year or in the first quarter of 2009, subject to customary closing conditions, including stockholder approval and certain governmental regulatory clearances.

Wrigley is a confections company. Mars is a McLean Va.-based producer of confectionery, food and petcare products.

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