Kroger Announces Commencement of Exchange Offers and Consent Solicitations for Albertsons Companies Notes
Kroger Co. (NYSE:KR) has initiated private exchange offers for certain eligible holders of Albertsons Companies notes, aiming to exchange up to $7.44 billion in new Kroger notes and cash. The exchange is linked to the anticipated merger between Kroger and Albertsons, expected to close in Q4 2024.
The offers target multiple Albertsons-issued notes, including series due from 2026 to 2037. Kroger seeks consent to amend indentures governing these notes, removing restrictive covenants and certain default events, among other changes. Eligible holders who tender notes before the Early Participation Date will receive incentives, including a $1 consent payment and up to $1,000 in Kroger notes per $1,000 of Albertsons notes.
The exchange offers and consent solicitations will expire on September 13, 2024, with the settlement date expected soon after.
Kroger Co. (NYSE:KR) ha avviato offerte di scambio private per alcuni detentori idonei di note di Albertsons Companies, con l'obiettivo di scambiare fino a 7,44 miliardi di dollari in nuove note Kroger e contante. Lo scambio è collegato alla fusione prevista tra Kroger e Albertsons, che dovrebbe essere conclusa nel quarto trimestre del 2024.
Le offerte mirano a diverse note emesse da Albertsons, comprese le serie in scadenza dal 2026 al 2037. Kroger cerca il consenso per modificare i contratti che regolano queste note, rimuovendo le restrizioni e alcuni eventi di default, tra le altre modifiche. I detentori idonei che presenteranno note prima della Data di Partecipazione Anticipata riceveranno incentivi, inclusi un pagamento di consenso di 1 dollaro e fino a 1.000 dollari in note Kroger per ogni 1.000 dollari di note Albertsons.
Le offerte di scambio e le sollecitazioni per il consenso scadranno il 13 settembre 2024, con la data di regolamento prevista poco dopo.
Kroger Co. (NYSE:KR) ha iniciado ofertas de intercambio privadas para ciertos tenedores elegibles de notas de Albertsons Companies, con el objetivo de intercambiar hasta 7.44 mil millones de dólares en nuevas notas de Kroger y efectivo. El intercambio está vinculado a la fusión anticipada entre Kroger y Albertsons, que se espera que se cierre en el cuarto trimestre de 2024.
Las ofertas se dirigen a múltiples notas emitidas por Albertsons, incluidas las series que vencen entre 2026 y 2037. Kroger busca el consentimiento para enmendar los contratos que rigen estas notas, eliminando convenios restrictivos y ciertos eventos de incumplimiento, entre otros cambios. Los tenedores elegibles que entreguen notas antes de la Fecha de Participación Anticipada recibirán incentivos, incluidos un pago de consentimiento de 1 dólar y hasta 1,000 dólares en notas de Kroger por cada 1,000 dólares de notas de Albertsons.
Las ofertas de intercambio y las solicitudes de consentimiento expirarán el 13 de septiembre de 2024, con la fecha de liquidación programada poco después.
Kroger Co. (NYSE:KR)는 특정 자격을 갖춘 Albertsons Companies의 채권 보유자들을 위해 사적인 교환 제안을 시작했으며, 최대 74억 4천만 달러의 새로운 Kroger 채권 및 현금으로 교환할 것입니다. 이 교환은 2024년 4분기에 종료될 것으로 예상되는 Kroger와 Albertsons 간의 합병에 연결되어 있습니다.
제안은 2026년부터 2037년까지 만기가 설정된 여러 개의 Albertsons 발행 채권을 대상으로 합니다. Kroger는 이러한 채권을 관리하는 계약을 수정하기 위한 동의를 요청하며, 제한적 약정 및 특정 디폴트 사건을 제거하는 등 여러 변경 사항이 포함되어 있습니다. 조기 참여 날짜 이전에 채권을 제출하는 자격 보유자는 1달러의 동의 지급과 함께 Albertsons 채권 1,000달러마다 Kroger 채권 최대 1,000달러를 받을 수 있는 인센티브를 받게 됩니다.
교환 제안 및 동의 요청은 2024년 9월 13일에 만료되며, 정산 날짜는 그 직후로 예상됩니다.
Kroger Co. (NYSE:KR) a lancé des offres d'échange privées pour certains détenteurs éligibles de titres d'Albertsons Companies, visant à échanger jusqu'à 7,44 milliards de dollars en nouvelles obligations Kroger et en espèces. L'échange est lié à la fusion anticipée entre Kroger et Albertsons, qui devrait être finalisée au quatrième trimestre 2024.
Les offres concernent plusieurs titres émis par Albertsons, y compris des séries arrivant à échéance de 2026 à 2037. Kroger cherche à obtenir le consentement pour modifier les contrats régissant ces titres, en supprimant les clauses restrictives et certains événements de défaut, entre autres changements. Les détenteurs éligibles qui tenderont des titres avant la date de participation anticipée recevront des incitations, y compris un paiement de consentement de 1 dollar et jusqu'à 1 000 dollars en obligations Kroger pour chaque 1 000 dollars de titres Albertsons.
Les offres d'échange et les sollicitations de consentement expireront le 13 septembre 2024, la date de règlement étant attendue peu après.
Kroger Co. (NYSE:KR) hat private Austauschangebote für bestimmte berechtigte Inhaber von Albertsons Companies Anleihen initiiert, mit dem Ziel, bis zu 7,44 Milliarden Dollar in neuen Kroger-Anleihen und Bargeld zu tauschen. Der Austausch steht im Zusammenhang mit der erwarteten Fusion zwischen Kroger und Albertsons, die voraussichtlich im vierten Quartal 2024 abgeschlossen wird.
Die Angebote richten sich an mehrere von Albertsons ausgegebene Anleihen, einschließlich Serien, die von 2026 bis 2037 fällig sind. Kroger möchte die Einwilligung zur Änderung der Verträge, die diese Anleihen regeln, einholen, um beschränkende Klauseln und bestimmte Ereignisse des Verzugs zu entfernen, neben weiteren Änderungen. Berechtigte Inhaber, die Anleihen vor dem vorzeitigen Teilnahmedatum einreichen, erhalten Anreize, darunter eine Einwilligungszahlung von 1 US-Dollar und bis zu 1.000 US-Dollar in Kroger-Anleihen pro 1.000 US-Dollar an Albertsons-Anleihen.
Die Austauschangebote und Einwilligungsanfragen laufen am 13. September 2024 ab, wobei das Abrechnungsdatum kurz danach erwartet wird.
- Kroger's exchange offer involves up to $7.44 billion in new notes and cash.
- Completion of the merger with Albertsons is expected by Q4 2024, potentially creating shareholder value.
- The exchange is dependent on obtaining requisite consents from Albertsons' noteholders.
- Noteholders who do not consent will be bound by amended, less favorable terms.
Insights
This announcement of exchange offers and consent solicitations by Kroger for Albertsons' outstanding notes is a significant development in Kroger's planned $24.6 billion acquisition of Albertsons. The exchange offers, totaling up to
The exchange offers provide incentives for early participation, including consent payments and early participation premiums. This strategy likely aims to ensure high participation rates, which is essential for Kroger to effectively manage the combined company's debt structure. The consent solicitations to amend indentures governing Albertsons' notes further indicate Kroger's intent to gain more flexibility in managing the acquired debt.
While this move signifies progress in the merger process, investors should note that the exchange offers are contingent on the merger closing, which is expected in Q4 2024. The transaction still faces regulatory scrutiny and its completion is not guaranteed. Overall, this development suggests Kroger is proactively preparing for the financial aspects of the merger, but uncertainties remain regarding the deal's ultimate approval and completion.
From a legal perspective, this complex transaction involves several critical elements. The exchange offers and consent solicitations are structured to comply with securities laws while maximizing participation. The Proposed Amendments to the indentures, requiring majority or supermajority consent depending on the note series, aim to remove restrictive covenants and certain default triggers. This could give Kroger more operational flexibility post-merger but may reduce some protections for noteholders.
The conditional nature of the offers, linked to the merger's completion, protects Kroger from being obligated to the exchanges if the merger falls through. However, it's important to note that while Kroger can waive most conditions, it cannot waive the merger completion requirement. This structure aligns the debt restructuring with the broader M&A transaction.
Investors should be aware that the exchange process includes specific deadlines and procedures, with different consideration offered for early participation. The legal intricacies of these offers underscore the importance of careful review by noteholders and their advisors to fully understand the implications and make informed decisions.
As previously announced, on October 13, 2022, the Company entered into an agreement and plan of merger (the "Merger Agreement"), by and among the Company, ACI and Kettle Merger Sub, Inc., a wholly owned subsidiary of the Company ("Merger Sub"), pursuant to which Merger Sub will be merged with and into ACI, with ACI surviving the merger as a direct, wholly owned subsidiary of the Company (the "Merger"). The Exchange Offers and Consent Solicitations (as defined herein) are being conducted in connection with and are conditioned upon, among other things, the completion of the Merger.
In conjunction with the Exchange Offers, the Company is concurrently soliciting consents (each a "Consent Solicitation" and, collectively, the "Consent Solicitations") to adopt certain proposed amendments to each of the indentures (each an "ACI Indenture" and, collectively, the "ACI Indentures") governing the ACI Notes to, among other things, eliminate from each of the ACI Indentures (i) substantially all of the restrictive covenants, (ii) certain of the events which may lead to an "Event of Default," (iii) the reporting covenant, (iv) any restrictions on the applicable ACI entities from consolidating with or merging into any other person or conveying, transferring or leasing all or any of their properties and assets to any person, (v) the covenant requiring certain subsidiaries of ACI to guarantee certain of the ACI Notes and (vi) any obligations to offer to repurchase the ACI Notes upon certain change of control transactions along with certain other ancillary amendments as further described in the Offering Memorandum and Consent Solicitation Statement (as defined below) (such amendments, with respect to the corresponding ACI Indenture for that series and, together as the context requires the "Proposed Amendments").
The Proposed Amendments with respect to each series of ACI Notes issued by ACI, Safeway, ASC, Albertsons and ASL require the consent of the holders of not less than a majority in principal amount of the ACI Notes of each affected series then outstanding under the applicable ACI Indenture voting as a separate class (the "ACI Requisite Consents"). The Proposed Amendments with respect to the ACI Notes issued by NALP require the consent of the holders of not less than 66 2/
If the Requisite Consents are obtained for a particular series of ACI Notes, any remaining ACI Notes for that series not tendered and exchanged for Kroger Notes will be governed by the applicable amended ACI Indenture. Each Exchange Offer and Consent Solicitation is conditioned upon, among other things, the completion of the other Exchange Offers and Consent Solicitations, although the Company may waive such condition at any time with respect to an Exchange Offer. Any waiver of a condition by the Company with respect to an Exchange Offer will automatically waive such condition with respect to the corresponding Consent Solicitation, as applicable.
The following table sets forth the Consent Payment (as defined herein), Exchange Consideration (as defined herein), Early Participation Premium (as defined herein) and Total Consideration (as defined herein) for each series of ACI Notes:
Title of Series of | Issuer(s) | CUSIP/ISIN No. | Maturity | Principal | Consent | Exchange | Early | Total | ||||||||
| ACI, | 144A: 013092 AF8 / Reg S: U0125L AG5 / | 03/15/2026 |
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| ACI, | 144A: 013092 AA9 / Reg S: U0125L AA8 / | 03/15/2026 |
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| ACI, | 144A: 013092 AC5 / Reg S: U0125L AC4 / JAN: U0125LAF7 / | 01/15/2027 |
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| ACI, | 144A: 013092 AB7 / Reg S: U0125L AB6 / | 02/15/2028 |
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| ACI, | 144A: 01309Q AA6 / Reg S: U0126B AA9 / | 02/15/2028 |
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| ACI, | 144A: 013092 AG6 / Reg S: U0125L AH3 / DEC: U0125LAJ9 / | 03/15/2029 |
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| ACI, | 144A: 013092 AE1 / Reg S: U0125L AE0 / | 02/15/2030 |
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| Safeway | 786514AS8 / | 09/15/2027 |
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| Safeway | 786514BA6 / | 02/01/2031 |
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| ASC | 030096AF8 / | 06/01/2026 |
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| ASC | 03009MBB1 / | 03/20/2028 |
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| ASC | 030096AH4 / | 05/01/2037 |
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| NALP | 01310QCH6 / | 07/22/2027 |
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| NALP | 01310QCK9 / | 07/23/2027 |
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| NALP | 01310QCL7 / | 07/26/2027 |
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| NALP | 01310QCW3 / | 02/23/2028 |
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| NALP | 01310QCZ6 / | 04/10/2028 |
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| NALP | 01310QCY9 / | 04/10/2028 |
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| NALP | 01310QDB8 / | 06/01/2028 |
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| NALP | 01310QDA0 / | 06/02/2028 |
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| NALP | 013104AC8 / | 06/15/2026 |
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| NALP | 013104AF1 / | 08/01/2029 |
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| NALP | 013104AH7 / | 05/01/2030 |
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| NALP | 013104AL8 / | 05/01/2031 |
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(1) | For each |
(2) | For each |
(3) | For each |
(4) | For each |
The Exchange Offers and Consent Solicitations are being made pursuant to the terms and subject to the conditions set forth in the confidential exchange offer memorandum and consent solicitation statement dated August 15, 2024 (the "Offering Memorandum and Consent Solicitation Statement"), including the closing of the Merger. Kroger generally may waive any such condition at any time with respect to an Exchange Offer or Consent Solicitation but may not waive the condition that the Merger shall have been consummated. Any waiver of a condition by Kroger with respect to an Exchange Offer will automatically waive such condition with respect to the corresponding Consent Solicitation, as applicable. In addition, Kroger may amend the terms of any Exchange Offer or Consent Solicitation without amending the terms of any other Exchange Offer or Consent Solicitation, respectively. Any amendment of the terms of an Exchange Offer by Kroger will automatically amend such terms with respect to the corresponding Consent Solicitation, as applicable. The closing of the Merger is not conditioned upon the commencement or completion of the Exchange Offers or Consent Solicitations.
Each Exchange Offer will expire at 5:00 p.m.,
If an Eligible Holder tenders ACI Notes in an Exchange Offer, such Eligible Holder will be deemed to have delivered its consent, with respect to the aggregate principal amount of such tendered ACI Notes, to the Proposed Amendments. Eligible Holders may not deliver a consent in the Consent Solicitation without tendering ACI Notes of the applicable series in the applicable Exchange Offer. Tendered ACI Notes may be withdrawn at any time before the Expiration Date; however, a valid withdrawal of the tendered ACI Notes after the Consent Revocation Deadline will not be deemed a revocation of the related consents and such consents will continue to be deemed delivered. Consents may not be revoked after the earlier of (i) 5:00 p.m.,
For each
For each
Each new series of Kroger Notes will have the same interest rate, maturity date, redemption terms and interest payment dates as the corresponding series of ACI Notes for which they are being offered in exchange.
Documents relating to the Exchange Offers and Consent Solicitations will only be distributed to Eligible Holders of ACI Notes who complete and return an eligibility certificate confirming that they are either a "qualified institutional buyer" under Rule 144A or not a "
This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful. The Exchange Offers and Consent Solicitations are being made solely pursuant to the Offering Memorandum and Consent Solicitation Statement and only to such persons and in such jurisdictions as are permitted under applicable law.
The Kroger Notes offered in the Exchange Offers have not been registered under the Securities Act of 1933, as amended, or any state securities laws. Therefore, the Kroger Notes may not be offered or sold in
About Kroger
At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: to Feed the Human Spirit™. We are, across our family of companies nearly 420,000 associates who serve over eleven million customers daily through a seamless digital shopping experience and retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. These statements are based on Kroger's assumptions and beliefs in light of the information currently available to the Company. These statements are subject to a number of known and unknown risks, uncertainties and other important factors, including the risks and other factors discussed in the "Risk Factors" section of the Offering Memorandum and Consent Solicitation Statement, that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward looking statements. Such statements are indicated by words or phrases such as "achieve," "affect," "anticipate," "assumptions," "believe," "committed," "continue," "could," "deliver," "effect," "enable," "estimate," "expects," "future," "goal," "growth," "guidance," "intended," "likely," "maintain," "may," "model," "plan," "position," "program," "result," "strategy," "strong," "trend," "will" and "would," and variations of such words and similar phrases. Forward-looking statements are subject to inherent risks and uncertainties. Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements. These include:
- the extent to which Kroger's sources of liquidity are sufficient to meet its requirements may be affected by the state of the financial markets and the effect that such condition has on its ability to issue commercial paper at acceptable rates. Kroger's ability to borrow under its committed lines of credit, including its bank credit facilities, could be impaired if one or more of Kroger's lenders under those lines is unwilling or unable to honor its contractual obligation to lend to Kroger, or in the event that global pandemics, natural disasters or weather conditions interfere with the ability of Kroger lenders to lend to Kroger. Kroger's ability to refinance maturing debt may be affected by the state of the financial markets;
- Kroger's ability to achieve sales, earnings, incremental FIFO operating profit, and adjusted free cash flow goals, which may be affected by: its proposed transaction with ACI including, among other things, Kroger's ability to consummate the proposed transaction and related divestiture plan, including on the terms of the Merger Agreement and divestiture plan, on the anticipated timeline, with the required regulatory approvals, and/or resolution of pending litigation challenging the Merger; labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market; changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with us; pricing and promotional activities of existing and new competitors, and the aggressiveness of that competition; Kroger's response to these actions; the state of the economy, including interest rates, the inflationary, disinflationary and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical environment including wars and conflicts; unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; supply constraints; diesel fuel costs related to Kroger's logistics operations; trends in consumer spending; the extent to which Kroger's customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which Kroger operates; Kroger's ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; Kroger's ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of Kroger's future growth plans; the ability to execute Kroger's growth strategy and value creation model, including continued cost savings, growth of Kroger's alternative profit businesses, and Kroger's ability to better serve its customers and to generate customer loyalty and sustainable growth through its strategic pillars of Fresh, Our Brands, Data & Personalization, and Seamless; the successful integration of merged companies and new partnerships; Kroger's ability to maintain an investment grade credit rating; and the risks relating to or arising from its proposed nationwide opioid litigation settlement, including our ability to finalize and effectuate the settlement, the scope and coverage of the ultimate settlement and the expected financial or other impacts that could result from the settlement;
- Kroger's ability to achieve these goals may also be affected by its ability to manage the factors identified above. Kroger's ability to execute its financial strategy may be affected by its ability to generate cash flow;
- Kroger's effective tax rate may differ from the expected rate due to changes in tax laws, the status of pending items with various taxing authorities, and the deductibility of certain expenses; and
- the outcome of the Exchange Offers and Consent Solicitations.
The Company cannot fully foresee the effects of changes in economic conditions on Kroger's business. Other factors and assumptions not identified above, including those discussed in the "Risk Factors" section of the Offering Memorandum and Consent Solicitation Statement, the "Risk Factors" section in Kroger's most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and in any subsequent documents that Kroger files with the
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SOURCE The Kroger Co.
FAQ
What is the purpose of Kroger's exchange offers for Albertsons notes?
When will Kroger's exchange offers for Albertsons notes expire?
What are the benefits for early participation in Kroger's exchange offers for Albertsons notes?
What conditions must be met for Kroger's exchange offers for Albertsons notes to proceed?
How will non-participating Albertsons noteholders be affected by Kroger's exchange offers?
