Buffets extends tender offer for 13 7/8% notes, amends payout

By Laura Lutz

Des Moines, Oct 16 - Buffets Holdings, Inc. revised the payout and pushed back the expiration date of the tender offer for its $132 million principal amount at maturity of 13 7/8% senior discount notes due 2010.

For each $1,000 principal amount of the 13 7/8% notes, Buffets Holdings will pay the sum of the accreted value of the $1,000 principal amount at maturity on the applicable payment date and 50% of a make-whole premium determined using the yield of a U.S. Treasury security maturing on or near the July 31, 2008 first redemption date for the notes plus 50 basis points and an additional premium amount.

As revised, the additional premium amount will be equal to 1.377181 multiplied by the difference between the accreted value of the notes on the applicable payment date and its accreted value on Dec. 29, 2005.

Buffets had not previously disclosed the size of the additional premium, saying that it was described in the tender offer documents.

The early tender deadline was moved to 9 a.m. ET on Oct 19 from Oct. 16, and the offer was extended to 9 a.m. ET on Nov. 3, from Oct 31.

The consent solicitations are to amend the note indentures to eliminate substantially all of the restrictive covenants and certain events of default.

The tender payment includes a $30 consent fee per $1,000 principal amount or principal amount at maturity of notes tendered before the early tender deadline.

The offer was announced on Sept. 15 alongside a tender offer for the 11¼% senior subordinated notes due 2010 of Buffets, Inc. The terms and expiration date of the offer for the 11¼% notes are unchanged.

For the 11¼% notes, Buffets will pay $1,058.75 per $1,000 principal amount plus accrued interest up to but excluding the payment date.

The payout for the 11¼% notes includes a $30.00 per $1,000 principal amount at maturity consent payment that will only be paid to holders who tender with consents by the early tender date of Oct. 16.

The 11¼% tender offer ends at 9 a.m. ET on Oct. 31.

Holders who tender are required to deliver consents in both offers.

The tenders are subject to conditions including the receipt of consents from holders of a majority of each series of notes and Buffets obtaining the financing needed to pay for the notes.

Buffets said On Sept. 15 that holders of more than 80% of the 13 7/8% notes had already agreed to tender their notes by Oct 16.

Credit Suisse Securities (USA) LLC is dealer manager for both offers (800 820-1653 or collect 212 538-0652). Morrow & Co., Inc. is the information agent (800 607-0088).

Buffets is an Eagan, Minn., restaurant operator.

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