Ferro Corporation (NYSE: FOE) ("the Company"), today announced the
tender offer consideration and the total consideration to be paid in
connection with the offer to purchase all of its outstanding 9 1/8%
Senior Notes due in January 2009 (the "Notes") being conducted pursuant
to the terms of and subject to the conditions in the Offer to Purchase
and Consent Solicitation Statement and the related Letter of
Transmittal, each dated June 20, 2008 (the “Offer
to Purchase”).
The total consideration for each $1,000 principal amount of Notes (the “Total
Consideration”), which will be payable in
respect of the Notes that are accepted for payment and that were validly
tendered on or prior to 5:00 p.m., New York City time, on July 3, 2008
(the “Consent Payment Deadline”),
will be $1,028.96 per $1,000 principal amount of the Notes. The Total
Consideration includes a consent payment of $15.00 for each $1,000
principal amount of Notes tendered by each holder of Notes that validly
tenders its Notes and delivers consents on or prior to the Consent
Payment Deadline if such Notes are accepted for purchase pursuant to the
tender offer. The Total Consideration was determined as of 10:00 a.m.,
New York City time, on July 3, 2008, and is equal to, for each $1,000
principal amount of Notes, the present value, minus accrued interest, on
the applicable payment date for the tender of Notes of (i) $1,000 on
January 1, 2009 (the "Redemption Date") and (ii) the remaining scheduled
interest payments on such Notes after the payment date for the tender of
Notes to the Redemption Date. The consideration was determined using a
basis of a yield to the Redemption Date equal to the sum of (A) the
yield on the 4.75% U.S. Treasury note due December 31, 2008 (the
"Reference Treasury Security"), as calculated by Credit Suisse
Securities (USA) LLC ("Credit Suisse"), acting as dealer manager, in
accordance with standard market practice, based on the bid side price
for the Reference Treasury Security on the price determination date, as
described in the tender offer documents, plus (B) a fixed spread of 50
basis points.
In addition to the Total Consideration, such tendering holders will
receive accrued and unpaid interest up to, but not including, the
payment date.
The tender offer will expire at 5:00 p.m., New York City time, on
Friday, July 18, 2008, unless further extended or earlier terminated.
The Company has retained Credit Suisse to serve as the dealer manager
and solicitation agent for the tender offer and the consent
solicitation. Questions regarding the tender offer and the consent
solicitation may be directed to 212-325-4951 (collect). Morrow & Co.
will serve as the information agent for the tender offer and can be
contacted at 800-607-0088.
About Ferro Corporation
Ferro Corporation (http://www.ferro.com)
is a leading global supplier of technology-based performance materials
for manufacturers. Ferro materials enhance the performance of products
in a variety of end markets, including electronics, solar energy,
telecommunications, pharmaceuticals, building and renovation,
appliances, automotive, household furnishings, and industrial products.
Headquartered in Cleveland, Ohio, the Company has approximately 6,300
employees globally and reported 2007 sales of $2.2 billion.
Cautionary Note on Forward-Looking
Statements
Certain statements in this Ferro press release may constitute “forward-looking
statements” within the meaning of Federal
securities laws. These statements are subject to a variety of
uncertainties, unknown risks and other factors concerning the Company’s
operations and business environment, which are difficult to predict and
often beyond the control of the Company. Important factors that could
cause actual results to differ materially from those suggested by these
forward-looking statements, and that could adversely affect the Company’s
future financial performance, include the following:
Our ability to obtain the financing for and consummate the tender
offer are subject to increases in interest rates and operating costs,
general volatility of the capital markets and our ability to access
the capital markets.
We depend on reliable sources of raw materials, including energy,
petroleum-based materials, and other supplies, at a reasonable cost,
but availability of such materials and supplies could be interrupted
and/or the prices charged for them could escalate.
The markets in which we participate are highly competitive and subject
to intense price competition.
We are striving to improve operating margins through sales growth,
price increases, productivity gains, and improved purchasing
techniques, and restructuring activities, but we may not be successful
in achieving the desired improvements.
Our products are sold into industries where demand is unpredictable,
cyclical or heavily influenced by consumer spending.
The global scope of our operations exposes us to risks related to
currency conversion rates and changing economic, social and political
conditions around the world.
We have a growing presence in the Asia-Pacific region where it can be
difficult for a U.S.-based company to compete lawfully with local
competitors.
Regulatory authorities in the U.S., European Union and elsewhere are
taking a much more aggressive approach to regulating hazardous
materials and those regulations could affect our sales and operating
profits.
Our operations are subject to operating hazards and, as a result, to
stringent environmental, health and safety regulations and compliance
with those regulations could require us to make significant
investments.
We depend on external financial resources and any interruption in
access to capital markets or borrowings could adversely affect our
financial condition.
Interest rates on some of our external borrowings are variable, and
our borrowing costs could be affected adversely by interest rate
increases.
Many of our assets are encumbered by liens that have been granted to
lenders, and those liens affect our flexibility in making timely
dispositions of property and businesses.
We are subject to a number of restrictive covenants in our credit
facilities, and those covenants could affect our flexibility in
funding strategic initiatives.
We have significant deferred tax assets, and our ability to utilize
these assets will depend on our future performance.
We are a defendant in several lawsuits that could have an adverse
effect on our financial condition and/or financial performance, unless
they are successfully resolved.
Our businesses depend on a continuous stream of new products, and
failure to introduce new products could affect our sales and
profitability.
We are subject to stringent labor and employment laws in certain
jurisdictions in which we operate and party to various collective
bargaining arrangements, and our relationship with our employees could
deteriorate, which could adversely impact our operations.
Employee benefit costs, especially post-retirement costs, constitute a
significant element of our annual expenses, and funding these costs
could adversely affect our financial condition.
Our restructuring initiatives may not provide sufficient cost savings
to justify their expense.
We are exposed to intangible asset risk.
We have in the past identified material weaknesses in our internal
controls, and the identification of any material weaknesses in the
future could affect our ability to ensure timely and reliable
financial reports.
We are exposed to risks associated with acts of God, terrorists and
others, as well as fires, explosions, wars, riots, accidents,
embargoes, natural disasters, strikes and other work stoppages,
quarantines and other governmental actions, and other events or
circumstances that are beyond our control.
Additional information regarding these risk factors can be found in the
Company’s Annual Report on Form 10-K for the
period ended December 31, 2007 and other filings with the Securities and
Exchange Commission.
The risks and uncertainties identified above are not the only risks the
Company faces. Additional risks and uncertainties not presently known to
the Company or that it currently believes to be immaterial also may
adversely affect the Company. Should any known or unknown risks and
uncertainties develop into actual events, these developments could have
material adverse effects on the Company’s
business, financial condition and results of operations.
This release contains time-sensitive information that reflects management’s
best analysis only as of the date of this release. The Company does not
undertake any obligation to publicly update or revise any
forward-looking statements to reflect future events, information or
circumstances that arise after the date of this release.
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