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Newell: Jarden holders may convert, tender notes after planned buyout
By Susanna Moon
Chicago, Jan. 14 – Newell Rubbermaid Inc. said holders may convert or tender the convertible notes issued by Jarden Corp. after the planned buyout because it constitutes a fundamental change under the note terms.
As part of the acquisition, Newell Rubbermaid expects to refinance about $4.5 billion of Jarden’s debt, including its credit facilities, some senior notes and its subordinated notes, and to assume about $632 million of Jarden senior notes, according to an S-4 filed with the Securities and Exchange Commission.
After the merger, Jarden holders may convert the outstanding convertible notes into Jarden common stock at a make-whole premium and receive the merger payment.
If holders elect not to convert, Newell Brands will be required to make a fundamental change repurchase offer after the completion of the first merger, which will allow holders to tender the convertibles at par plus accrued interest.
After the completion of the fundamental change repurchase offer, the conversion price for the Jarden convertibles will be fixed at the merger price.
As part of the merger plans, the company also expects to incur about $10.2 billion of new debt, with up to $8.7 billion of newly issued Newell Rubbermaid debt securities and a $1.5 billion term loan facility.
As reported Dec. 14, Newell Rubbermaid entered into a commitment letter with Goldman Sachs Bank USA for a $10.5 billion 364-day senior bridge facility for the planned acquisition.
Atlanta-based Newell Rubbermaid is a consumer and commercial products maker. Jarden is a Boca Raton, Fla.-based consumer products company.
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