Supervalu to Purchase Subsidiary's Security Units
MINNEAPOLIS - Leading wholesaler and retailer Supervalu, Inc. said yesterday it is offering to purchase any and all of the outstanding 7.25 percent hybrid income term security units held in the form of corporate units of its wholly-owned subsidiary, New Albertson's, Inc., at a purchase price in cash of $25.22 per unit.
Holders of corporate units whose units are accepted for purchase will also receive a scheduled quarterly contract adjustment payment and interest payment, worth about 45 cents per corporate unit, payable on Nov. 16.
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Supervalu said it is conducting the offer to reduce the amount of debt maturing in 2009 and lengthen the term to maturity of its outstanding debt, and to avoid considerations and fees inherent in the remarketing process relating to the senior notes associated with the corporate units.
Regardless of the number of corporate units retired and canceled in the offer, it is expected that New Albertson's will seek to de-list the corporate units from the New York Stock Exchange following the consummation of the offer.
The offer will expire on Nov. 20.
As of Oct. 20, nearly 46 million corporate units were outstanding. Each unit consists of a contract to purchase, for $25, cash and a fraction of a share of Supervalu's common stock on May 16, 2007, as well as a 2.5 percent ownership interest in one of the senior notes that is pledged to secure the holder's obligations under the purchase contract.
Supervalu also announced its intention to offer, subject to market and other conditions, $500 million in aggregate principal amount of its senior notes due 2014. The notes will be senior obligations and will rank equally with all of Supervalu's other senior unsecured indebtedness.
Supervalu intends to use the net proceeds from the offering of the notes to purchase corporate units tendered in the offer.
Holders of corporate units whose units are accepted for purchase will also receive a scheduled quarterly contract adjustment payment and interest payment, worth about 45 cents per corporate unit, payable on Nov. 16.
(Story continues below.)
Supervalu said it is conducting the offer to reduce the amount of debt maturing in 2009 and lengthen the term to maturity of its outstanding debt, and to avoid considerations and fees inherent in the remarketing process relating to the senior notes associated with the corporate units.
Regardless of the number of corporate units retired and canceled in the offer, it is expected that New Albertson's will seek to de-list the corporate units from the New York Stock Exchange following the consummation of the offer.
The offer will expire on Nov. 20.
As of Oct. 20, nearly 46 million corporate units were outstanding. Each unit consists of a contract to purchase, for $25, cash and a fraction of a share of Supervalu's common stock on May 16, 2007, as well as a 2.5 percent ownership interest in one of the senior notes that is pledged to secure the holder's obligations under the purchase contract.
Supervalu also announced its intention to offer, subject to market and other conditions, $500 million in aggregate principal amount of its senior notes due 2014. The notes will be senior obligations and will rank equally with all of Supervalu's other senior unsecured indebtedness.
Supervalu intends to use the net proceeds from the offering of the notes to purchase corporate units tendered in the offer.