Delhaize America Issues Tender Offer for Up to $1.1 Billion of Debt

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Delhaize America Issues Tender Offer for Up to $1.1 Billion of Debt

BRUSSELS, Belgium -- International food retailer Delhaize Group here said yesterday that Delhaize America, Inc., its wholly owned subsidiary, had launched a tender offer to repurchase for cash up to $1.1 billion of its own debt.

The company will purchase notes due in 2011 and 2027, and debentures due in 2031. Two series of senior notes will finance the buyback, the company said.

Any net proceeds from the buyback will go to general corporate purposes, Delhaize said.

The early tender time and withdrawal deadline are June 12, 2007, 5:00 p.m., New York City time, unless extended. The price determination date is June 12, 2007, 11:00 a.m., New York City time, unless extended. Early tender results and pricing will be announced one business day after the price determination date. The expiration time is June 26, 2007, midnight, New York City time, unless extended, with announcement of the final tender results scheduled for one business day after the expiration time. The expected settlement date will be two business days after the expiration time.

Holders must tender and not withdraw at or before the early tender time to receive the "total consideration," which includes the early tender premium. Holders who tender after the early tender time but before the expiration time will get only the tender offer consideration, which is equal to the total consideration less the early tender premium. Tendered securities may only be withdrawn at or before the withdrawal deadline.

Delhaize Group expects to incur a one-time charge in the second quarter of 2007 because the outstanding debt will be purchased above its carrying value. The precise amount of the charge and the additional income statement impact will depend on the final conditions of the transaction. Starting in 2008, the transaction is expected to have an annual net favorable impact on the company's net earnings.

Banc of America Securities, LLC and Merrill Lynch & Co. are the dealer managers for the tender offer, and Global Bondholders Services Corp. is serving as the information agent and the depositary.

Delhaize has holdings in eight countries on three continents. At the end of 2006 it employed about 142,500 people.

In other Delhaize news, its Food Lion division, based in Salisbury, N.C., said this week that it intends to convert eight stores in the Hampton Roads-Norfolk area of Virginia to its upscale Bloom concept by the close of the year. Renovation has already started at five stores.

Among the selected locations are Williamsburg, Carrollton, Chesapeake, and Virginia Beach. Food Lion spokeswoman Kimberly Blackburn characterized the conversions as part of the company's market renewal efforts, which it began last year in the Washington, D.C. area.

Food Lion also said that it would convert 10 stores in the area to discount Bottom Dollar stores, with the first re-branded locations possibly debuting as soon as the middle of August. Locations for future Bottom Dollar stores included Newport News, Hampton, Norfolk, Portsmouth, and Virginia Beach.

According to Blackburn, market renewal was underway at Food Lion's stores in the Myrtle Beach, S.C. region as well, "although the Hampton Roads renewal will be the only area where we'll have the store conversions.

"In Myrtle Beach we will be giving the current Food Lion stores a face lift," continued Blackburn. "The Hampton Roads-area renewals will also include a face lift of the remaining Food Lion stores."