Lack of financing stalls Kohlberg's buyout of Centerplate

By Lisa Kerner

Charlotte, N.C., Nov. 5 - Centerplate Inc. said that Kohlberg & Co. is committed to closing its merger with Centerplate in the first quarter of 2009 even though National City Bank backed out of its financing commitment.

Kohlberg had obtained a commitment letter from National City to provide $175 million of debt financing, according to a form 8-K filing with the Securities and Exchange Commission.

But now National City believes it does not have an obligation under the commitment letter due to events in the financial, banking and capital markets that could "reasonably be expected to have an adverse impact in a material respect on the successful syndication of the proposed senior credit facilities," it was reported in the filing.

If Kohlberg refuses to close the transaction, Centerplate is not entitled under the terms of the merger agreement to seek court action to force Kohlberg to close. Kohlberg would be required to pay a reverse termination fee to Centerplate if the conditions to its obligation to close have been satisfied, the filing said.

It was previously reported that Kohlberg would buy Centerplate through a debt tender for up to 70% of its notes and a merger in which 100% of its common stock will be acquired.

Each unitholder who tenders the notes underlying their units will receive $3.99 for each note tendered, subject to proration if more than 70% of the notes are tendered, a prior news release said.

At the closing of the acquisition, each unitholder would also receive $0.01 per share for the common stock underlying the units for a total payment to income deposit securities holders of $4.00 per unit.

Centerplate is a Stamford, Conn., provider of food and related services including concessions, catering and merchandise services.

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