Vector Group Ltd. (NYSE: VGR) ("Vector") announced today that it is commencing a
cash tender offer (the "Tender Offer") with respect to any and all of its
outstanding 11% Senior Secured Notes due 2015 (the "Notes"). In conjunction with
the Tender Offer, the Company is soliciting consents ("Consents") from holders
of the Notes to certain proposed amendments (the "Proposed Amendments") to the
indenture (the "Indenture") governing the Notes (the "Consent Solicitation").
The Proposed Amendments would amend the Indenture to eliminate substantially all
of the restrictive covenants and certain events of default and other related
provisions contained in the Indenture. Delivery of consents to the Proposed
Amendments by holders of at least a majority of the aggregate principal amount
of the outstanding Notes (excluding any Notes owned by Vector, any subsidiary
guarantor of the Notes (a "Guarantor") or any of their respective affiliates) is
required for the adoption of the Proposed Amendments.
The Notes and other information relating to the Tender Offer and the Consent
Solicitation are set forth in the table below.
Notes CUSIPNumbers ISIN Numbers Principal Amount Outstanding Tender Offer Consideration(1) Consent Payment(1) Total Consideration(1)
11% Senior Secured Notes due 2015 92240MAP3 US92240MAP32 $415,000,000 $1,012.92 $30 $1,042.92
(1) Per $1,000 principal amount of Notes and excluding accrued and unpaid
interest, which will be paid in addition to the Total Consideration or the
Tender Offer Consideration, as applicable. Participating holders will receive
accrued and unpaid interest, if any, on their accepted Notes up to but not
including the applicable settlement Date.
Each holder who validly tenders and does not withdraw its Notes and validly
delivers and does not revoke its corresponding Consents prior to 11:59 p.m., New
York City time, on February 11, 2013 (as may be extended or earlier terminated,
the "Consent Expiration Time") will receive, if such Notes are accepted for
purchase pursuant to the Tender Offer and the Consent Solicitation, the total
consideration of $1,042.92 per $1,000 principal amount of Notes tendered, which
includes the tender offer consideration of $1,012.92 and a consent payment of
$30.00. Holders who validly tender and do not withdraw their Notes and validly
deliver and do not revoke their corresponding Consents after the Consent
Expiration Time but prior to the Expiration Time will receive only the tender
offer consideration of $1,012.92 per $1,000 principal amount of Notes tendered
and will not be entitled to receive a consent payment if such Notes are accepted
for purchase pursuant to the Tender Offer and the Consent Solicitation. In
addition, accrued and unpaid interest up to, but not including, the applicable
settlement date of the Notes will be paid in cash on all validly tendered and
The Tender Offer and the Consent Solicitation are scheduled to expire at 12:01
a.m., New York City time, on February 27, 2013, unless extended or earlier
terminated (the "Expiration Time"). Tendered Notes may be withdrawn at any time
prior to 11:59 p.m., New York City time, on February 11, 2013 (unless such
deadline is extended) but not thereafter, except to the extent that Vector is
required by law to provide additional withdrawal rights.
Subject to the terms and conditions described below, payment of the tender offer
consideration and consent payment to holders who tendered Notes prior to the
Consent Expiration Time will occur promptly after the Consent Expiration Time
(the "Early Settlement Date"). Payment of the tender offer consideration to
holders who tendered notes prior to the Expiration Time but after the Consent
Expiration Time will occur promptly after the Expiration Time (the "Final
The consummation of the Tender Offer and the Consent Solicitation is conditioned
upon, among other things, (i) Vector`s consummation of a debt financing
transaction and its possession of additional funds sufficient to pay the tender
offer consideration and consent payment, accrued and unpaid interest and all
related fees and expenses with respect to all Notes (regardless of the amount of
Notes tendered pursuant to the Tender Offer), (ii) the valid tender of Notes
(which are not withdrawn) by holders of at least a majority of the aggregate
principal amount of the outstanding Notes (excluding any Notes owned by Vector,
any Guarantor or any of their respective affiliates), and (iii) the execution,
delivery and effectiveness of the supplement to the Indenture, which will
implement the Proposed Amendments. If any of the conditions is not satisfied,
Vector may terminate the Tender Offer and the Consent Solicitation and return
tendered Notes. Vector has the right to waive any of the foregoing conditions
with respect to the Notes in whole or in part. In addition, Vector has the
right, in its sole discretion, to terminate the Tender Offer and the Consent
Solicitation at any time, subject to applicable law.
The purpose of the Tender Offer is for Vector to improve its financial position
by acquiring any and all of its outstanding Notes, whether pursuant to the
Tender Offer or in connection with any redemption of any Notes outstanding after
the consummation of the Tender Offer and, together with the debt financing
transaction to fund the Tender Offer, extend the maturity of certain of Vector`s
indebtedness. The Consent Solicitation is intended to eliminate most of the
covenants and certain events of default applicable to the Notes. On the Early
Settlement Date or, if the Early Settlement Date does not occur, the Final
Settlement Date, Vector intends to issue a notice of redemption and concurrently
discharge its obligations under the Notes and the Indenture in accordance with
the satisfaction and discharge provisions of the Indenture.
This announcement shall not constitute an offer to purchase or a solicitation of
an offer to sell any securities. The complete terms and conditions of the Tender
Offer and the Consent Solicitation are set forth in an Offer to Purchase and
Consent Solicitation Statement, dated January 29, 2013, and the related Letter
of Transmittal (the "Tender Offer Documents") that are being sent to holders of
the Notes. The Tender Offer and the Consent Solicitation are being made only
through, and subject to the terms and conditions set forth in, the Tender Offer
Documents and related materials.
Jefferies & Company, Inc. will act as Dealer Manager for the Tender Offer and as
Solicitation Agent for the Consent Solicitation. Questions regarding the Tender
Offer and the Consent Solicitation may be directed to Jefferies & Company, Inc.
at (888) 708-5831 (toll-free) or at (203) 708-5831 (collect).
i-Deal LLC will act as the Information Agent and the Tender Agent for the Tender
Offer and Consent Solicitation. Requests for the Tender Offer Documents may be
directed to i-Deal LLC at (212) 849-3880 (for brokers and banks) or (888)
593-9546 (for all others).
None of Vector, its board of directors, the Guarantors, the trustee and the
collateral agent for the Notes, the Information Agent, the Tender Agent, the
Dealer Manager and the Solicitation Agent or any of their respective affiliates
makes any recommendation as to whether holders should tender, or refrain from
tendering, all or any portion of the principal amount of their Notes pursuant to
the Tender Offer or deliver, or refrain from delivering, any consent to the
Proposed Amendments pursuant to the Consent Solicitation.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The Company has
tried, whenever possible, to identify these forward-looking statements using
words such as "anticipates", "believes", "estimates", "expects", "plans",
"intends" and similar expressions. These statements reflect the Company`s
current beliefs and are based upon information currently available to it.
Accordingly, such forward-looking statements involve known and unknown risks,
uncertainties and other factors which could cause the Company`s actual results,
performance or achievements to differ materially from those expressed in, or
implied by, such statements.
All information set forth in this press release is as of January 29, 2013.
Vector does not intend, and undertakes no duty, to update this information to
reflect future events or circumstances. Risk factors and uncertainties that may
cause actual results to differ materially from expected results include, among
others, our ability to successfully complete the Tender Offer and Consent
Solicitation. Information about certain other potential factors that could
affect our business and financial results and cause actual results to differ
materially from those expressed or implied in any forward-looking statements are
included from time to time in our filings with the SEC, including Part I, Item
1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December
31, 2011 and Part II, Item 1A "Risk Factors" of our Quarterly Reports on Form
10-Q for the fiscal quarters ended March 31, 2012, June 30, 2012 and September
Vector Group is a holding company that indirectly owns Liggett Group LLC and
Vector Tobacco Inc. and directly owns New Valley LLC.
Sard Verbinnen & Co
Paul Caminiti / Jonathan Doorley
Copyright Business Wire 2013