Spartan Stores Closes $110M Notes Offering to Help Fund Felpausch Buy

GRAND RAPIDS, Mich. -- Spartan Stores, Inc. here said it closed its offering of $110 million aggregate principal amount of unsecured 3.375 percent convertible senior notes due May 15, 2027, which includes the full exercise by the initial purchasers of a $15 million over-allotment option.

The notes were sold in a private placement in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.

Spartan, which received approximately $106.5 million from the sale of the notes after deducting selling discounts and estimated offering expenses, said it intends to use the net proceeds to pay amounts owed under its revolving credit facility and for working capital, capital expenditures, and other general corporate purposes, including funding the previously announced acquisition of Felpausch retail stores.

Spartan said it expects issuance of the notes and the proceeds to result in lower borrowing costs and thus to be accretive to net earnings.

Under the terms of the notes, Spartan Stores may redeem them for specified prices on and after May 20, 2012 and at par on and after May 15, 2014. Holders will have the right to require Spartan Stores to repurchase their notes on specified dates (the first of which is May 15, 2014) or upon the occurrence of specified events.

Spartan Stores, Inc., with warehouse facilities in Grand Rapids and Plymouth, Mich., serves some 400 independent grocery stores in Michigan, Indiana and Ohio and also owns and operates 68 retail supermarkets and 19 deep-discount food and drug stores in Michigan and Ohio, including Family Fare Supermarkets, Glen's Markets, D&W Fresh Markets, and The Pharm.
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