Reynolds Group Offers to Acquire Graham Packaging Company Inc.
14 Junho 2011 - 10:19AM
Business Wire
Reynolds Group Holdings Limited (“Reynolds Group”) today
announced that it has negotiated definitive terms and conditions to
acquire all of the outstanding shares of Graham Packaging Company
Inc. (“Graham”; NYSE: GRM) for $25.00 per share in cash.
Graham has announced that its board of directors, upon
recommendation of its special committee, has determined that the
Reynolds Group proposal is superior to its pending transaction with
Silgan Holdings Inc. (“Silgan”; Nasdaq: SLGN). Graham has provided
Silgan with three business days' written notice prior to Graham’s
board of directors changing its recommendation with respect to the
pending transaction with Silgan, during which period Silgan has the
right to make a responsive offer.
Pursuant to the Reynolds Group proposed merger agreement, Graham
shareholders will receive $25.00 in cash for each share of Graham
common stock, representing a total enterprise value, including net
debt, of approximately $4.5 billion. Graham is a leading global
supplier of value-added rigid plastic containers for the food,
specialty beverage and consumer products markets. The proposed
transaction is expected to close in the second half of 2011 and is
subject to customary regulatory approvals and closing conditions,
including the approval of Graham’s stockholders.
Reynolds Group expects to finance the purchase price and
associated transaction costs, with new indebtedness of up to $5
billion and existing cash on hand. The transaction is supported by
fully committed financing.
Reynolds Group expects to realize strategic benefits and
operational cost synergies as a result of the combination. These
synergies will be achieved primarily through reductions in
administrative expenses, procurement savings and logistics
efficiencies.
Pro forma for the transaction, Reynolds Group’s leverage ratio
is expected to increase by approximately 0.5 times Pro Forma
Adjusted EBITDA. Reynolds Group has a longstanding track record of
deleveraging following the successful integration of
acquisitions.
As part of the transaction, Reynolds Group intends to repay
Graham’s existing credit facilities. Reynolds Group has not made a
decision as to whether it will retire Graham’s existing senior
unsecured notes and senior subordinated notes. To the extent these
notes remain outstanding after the acquisition, Graham will be
required to make a change of control offer.
There can be no assurance that Reynolds Group’s offer to acquire
Graham will result in a definitive agreement or that such a
proposed acquisition will be completed.
About Reynolds Group:
Reynolds Group is a leading global manufacturer and supplier of
consumer food and beverage packaging and storage products: Reynolds
Group is based in Auckland, New Zealand. Additional information
regarding Reynolds Group is available at
www.reynoldsgroupholdings.com.
This announcement is not an offer to sell or a solicitation of
an offer to purchase any indebtedness used to finance the
acquisition of Graham Packaging and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which, or to
any person to whom such an offer, solicitation or sale would be
unlawful. Any indebtedness that may by used to finance the
acquisition of Graham Packaging may not be registered under the
United States Securities and Exchange Act of 1933, as amended, and
may not be offered or sold within the United States absent
registration or an applicable exemption from registration
requirements.
Forward-Looking Statements:
This press release may contain “forward-looking statements.”
Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of Reynolds Group, taking
into account the information currently available to our management.
Forward-looking statements are not statements of historical fact.
For example, when we use words such as “believe,” “anticipate,”
“expect,” “estimate,” “intend,” “should,” “would,” “could,” “may,”
“will” or other words that convey uncertainty of future events or
outcomes, we are making forward-looking statements. While
management has based any forward-looking statements contained
herein on its current expectations, the information on which such
expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control that could cause
actual results to materially differ from such statements. Such
uncertainties, risks and assumptions, include, but are not limited
to: risks related to the entry into a definitive merger agreement
with Graham or the completion of a related acquisition, risks
related to the cost of raw materials, our suppliers for raw
materials and any interruption to our supply of raw materials;
risks related to our substantial indebtedness and our ability to
service our indebtedness; risks related to our aluminium hedging
activities and other hedging activities may result in significant
losses and in period-to-period earnings volatility; risks related
to downturns in our target markets; risks related to increases in
interest rates which would increase the cost of servicing our debt;
risks related to dependence on the protection of our intellectual
property and the development of new products; risks related to
exchange rate fluctuations; risks related to the consolidation of
our customer base, competition and pricing pressure; risks related
to the impact of a loss of one of our manufacturing facilities;
risks related to our exposure to environmental liabilities and
potential changes in legislation or regulation; and risks related
to our dependence on key management and other highly skilled
personnel.
Given these risks and uncertainties, you are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Except as required by law, we
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. All subsequent written and oral
forward-looking statements attributable to us or to persons acting
on our behalf are expressly qualified in their entirety by the
cautionary statements referred to above.
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