Competing bids for ElkCorp backed by $1.215 billion, $1.875 billion in debt

By Sara Rosenberg

New York, Jan. 18 - ElkCorp's two competing buyout bids are being backed by debt financing commitments - with The Carlyle Group's debt plans totaling $1.215 billion and Building Materials Corp. of America's debt plans totaling $1.875 billion, according to SC TO-T's filed with the Securities and Exchange Commission Thursday.

Carlyle, who is tendering for ElkCorp's shares at a price of $40.50 per share, is using Bank of America, Merrill Lynch and General Electric Capital Corp. as its lead banks.

Carlyle's planned debt financing will include a $750 million senior secured credit facility consisting of a $100 million six-year revolver at Libor plus 225 basis points with a 50 bps commitment fee, a $450 million seven-year first-lien term loan at Libor plus 225 bps and a $200 million 71/2-year second-lien term loan at Libor plus 625 bps with call protection of 102 in year one and 101 in year two.

There is also a commitment for a $465 million senior secured 180-day bridge loan tender facility at Libor plus 300 bps.

Meanwhile, Building Materials Corp. of America, which is tendering for ElkCorp's shares at a price of $42 per share, is using Deutsche Bank, Bear Stearns and JPMorgan as its lead banks.

Building Materials' financing plans include a $1.55 billion senior secured credit facility consisting of a $950 million seven-year term loan at Libor plus 275 bps and a $600 million five-year revolver at Libor plus 150 bps with a 30 bps undrawn fee.

The company also plans to issue $325 million in senior secured notes.

Since the competing bids have emerged, ElkCorp has been suggesting to shareholders that they accept the Carlyle offer; however, no specific announcement came out of the company after Building Materials raised its offer on Thursday.

ElkCorp is a Dallas-based manufacturer of roofing and building products.

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