ConAgra tenders for floaters and Ralcorp's 7.29%, 7.39% notes; exchange offers also launched

By Susanna Moon

Chicago, Dec. 31 - ConAgra Foods, Inc. said it began tender offers for its $20 million floating-rate notes due Aug. 15, 2018 and for the $577.5 million 7.29% notes due Aug. 15, 2018 and $67 million 7.39% notes due Aug. 15, 2020 issued by Ralcorp Holdings, Inc.

ConAgra Foods also began exchange offers for the $300 million 4.95% notes due Aug. 15, 2020 and the $450 million 6.625% notes due Aug. 15, 2039, both issued by Ralcorp. In exchange, ConAgra will offer up to $300 million principal amount of new 4.95% notes due Aug. 15, 2020 and up to $450 million principal amount of new 6.625% notes due Aug. 15, 2039, respectively, both issued by ConAgra Foods.

The offers are being made in connection with the ConAgra's plans to acquire Ralcorp, according to ConAgra press releases.

ConAgra also is soliciting consents to amend the notes to eliminate covenants, restrictive provisions and events of default.

Tender offers

In the tender offer for the floaters, the total purchase price will be $1,012.50 for each $1,000 principal amount of notes tendered by 5 p.m. ET on Jan. 14, the early tender date.

The total payment for the two series of Ralcorp notes will be set at the present value on the settlement date of the principal amount of each note series payable at maturity plus the remaining scheduled interest payments through maturity, computed using a discount rate equal to the reference Treasury rate plus a fixed spread of 50 basis points.

The total amounts include an early tender payment of $30 per $1,000 of notes.

Those who tender their notes after the early deadline will not receive the early tender payment.

Holders also will receive accrued interest to but excluding the settlement date.

The offers will end at 5 p.m. ET on Jan. 29.

Holders who tender their notes must consent to the proposed amendments, and holders may not deliver consents without tendering their notes.

If the holders deliver consents for a majority of the outstanding notes, Ralcorp will execute a supplemental indenture amending the notes, the press release noted.

Each tender offer and consent solicitation is conditioned on completion of the acquisition but not on the completion of any other offer or consent solicitation.

The completion of the acquisition, on the other hand, is not subject to a financing condition and is not subject to the completion of the tender offers and consent solicitations, the release noted.

Ralcorp will hold a shareholder meeting on Jan. 29 to approve the acquisition.

Global Bondholder Services Corp. (866 389-1500 or 212 430-3774 for banks and brokers) is the tender and information agent. Bank of America Merrill Lynch (888 292-0070 or 980 388-3646) is the dealer manager and solicitation agent.

Exchange offer

In the exchange offer, the total payment will be $970 par amount of new notes plus $2.50 in cash for each $1,000 principal amount of notes tendered by 5 p.m. ET on Jan. 14, the early tender date.

The total payment includes $30 of new notes per $1,000 of notes tendered by the early deadline.

Holders who tender their notes after the early deadline will receive the total payment less the early tender premium.

The company also will pay accrued interest to but excluding the settlement date.

Tendered notes may be withdrawn by the early tender deadline.

The exchange offer ends at 5 p.m. ET on Jan. 29.

The exchange offers are not conditioned on the company receiving enough consents to amend the notes.

The offers are only being made to qualified institutional buyers under Rule 144A or those who are not U.S. persons under Regulation S.

Bank of America Merrill Lynch (866 389-1500 or 212 430-3774 for banks and brokers) is the dealer manager and solicitation agent.

The commercial and consumer foods company is based in Omaha.

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