Dakota City, NE - IBP, inc announced the commencement of a cash tender offer for all of the $115,050,000 outstanding principal amount of 10 3/4% Senior Subordinated Notes due 2006 (the "Notes") of Foodbrands America, Inc. ("Foodbrands"), an indirect, wholly-owned subsidiary of IBP. Concurrently with the tender offer, Foodbrands is soliciting consents to eliminate substantially all of the restrictive covenants and certain related provisions (the "Proposed Amendments") in the Indenture pursuant to which the Notes were issued (the "Indenture"). The Proposed Amendments will not become effective unless the Notes are purchased by IBP pursuant to the tender offer.
The purchase price to be paid for each $1,000 principal amount of Notes tendered will be based on the present value of the Notes determined using the earliest date the Notes are subject to redemption by Foodbrands under the Indenture and a yield equal to a fixed spread of 35 basis points over the yield of the 8.00% U.S. Treasury Note due May 15, 2001, as calculated at 2:00 p.m., New York City time, on March 20, 1998, or if the tender offer is extended, the third business day prior to the expiration date of the tender offer (March 20, 1998, or such later date, the "Pricing Date"), less $5.00. If the tender offer is extended more than three business days later than March 25, 1998, the Pricing Date will be extended to the date that is the third business day prior to the revised Expiration Date (as defined below). The tender offer is conditioned on, among other things, the receipt of consents to the Proposed Amendments from the holders of at least a majority in principal amount of the Notes (the "Requisite Consents"). Holders who tender their Notes in the tender offer will be required to consent to the Proposed Amendments.
IBP will pay a consent payment of $5.00 per $1,000 principal amount of Notes (the "Consent Payment"), but only to holders of Notes who tender their Notes and give their consent on or prior to 12:00 midnight, New York City time, on the Consent Date. The Consent Date is the later of March 11, 1998 or the Consent Achievement Date. The Consent Achievement Date is the date on which Foodbrands receives the Requisite Consents to modify the Indenture. The tender offer is scheduled to expire at 12:00 midnight, New York City time, on March 25, 1998 (the "Expiration Date"). The consent solicitation is scheduled to expire at 12:00 midnight, New York City time, on the Consent Date. Tendered Notes may be withdrawn and related consents may be revoked at any time on or prior to the Consent Achievement Date but, subject to limited exceptions, not thereafter.
This press release is neither an offer to purchase nor a solicitation of an offer to sell securities. The tender offer is made only by the Offer to Purchase and Consent Solicitation Statement. For information regarding the pricing, tender and delivery procedures and conditions of the tender offer and consent solicitation, reference is made to the Offer to Purchase and Consent Solicitation Statement and related documents. Documents can be obtained by contacting MacKenzie Partners, Inc., the Information Agent for the tender offer and the consent solicitation, at (800) 322-2885.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") is the Dealer Manager for the tender offer and consent solicitation. Questions concerning the tender offer and consent solicitation may be directed to Paul Galant or Jeff Dorst of DLJ at (800) 334-1604.
IBP is the world's largest producer of fresh beef, pork and related allied products and is also a high quality supplier of fully prepared meats for the retail and food service industries. IBP employs approximately 38,000 people. Foodbrands is a leading producer of frozen and refrigerated processed food products, and a leader in the pizza topping industry. Foodbrands also produces custom products including pizza crusts, burritos, soups, sauces and stuffed pastas.
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