Hilton Hotels Corporation Commences Cash Tender Offers and Related Consent Solicitations for $1.8 Billion of Its Outstanding Debt Securities
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Hilton Hotels Corporation Commences Cash Tender Offers and Related Consent Solicitations for $1.8 Billion of Its Outstanding Debt Securities
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Category: Worldwide
This is a press release selected by our editorial committee and published online for free on 2007-09-17
Hilton Hotels Corporation (NYSE:HLT) ("Hilton") announced today that it has commenced cash tender offers in respect of an aggregate of approximately $1.8 billion of its outstanding unsecured debt securities, which we refer to as the "Securities." The Securities comprise the notes identified in the first table below (the "Notes"), the 8.000% Quarterly Interest Bonds due 2031 (the "Bonds") and the 7.430% Chilean Inflation-Indexed (UF) Notes due 2009 (the "CLP Notes"), in each case issued by Hilton. The tender offer for each series of Securities is being conducted concurrently with a related consent solicitation to amend the terms of such Securities and the indenture pursuant to which the Securities were issued (the "Indenture"). The tender offers and consent solicitations are being conducted in connection with the previously announced merger agreement that provides for the acquisition of Hilton by BH Hotels LLC, an entity controlled by investment funds affiliated with The Blackstone Group L.P. (such transaction referred to herein as the "Merger"). The completion of the tender offers and consent solicitations is not a condition to completion of the Merger.
The offer for each issue of Securities will expire at 8:00 a.m., New York City time, on October 11, 2007, unless extended or earlier terminated by Hilton (the "Offer Expiration Date"). Holders who wish to receive the total consideration for the Securities referred to below must validly tender and not validly withdraw their Securities at or prior to 5:00 p.m., New York City time, on September 25, 2007, unless extended or earlier terminated (the "Consent Payment Deadline").
Holders tendering their Securities will be required to consent to proposed amendments to the Securities, the Indenture and the related officers' certificates, which would eliminate substantially all of the restrictive covenants contained in the Securities, the Indenture and the related officers' certificates, eliminate certain events of default, modify or eliminate covenants regarding consolidations, mergers and sale of assets and company reports and modify or eliminate certain other provisions, including, without limitation, certain provisions relating to defeasance contained in the Securities, the Indenture and the related officers' certificates. Holders may not tender their Securities without also delivering consents and may not deliver consents without also tendering their Securities.
The total consideration for each $1,000 principal amount of Notes validly tendered and not validly withdrawn pursuant to each tender offer is the price (calculated as described in the Offer to Purchase referred to below) equal to (i) the sum of (a) the present value, determined in accordance with standard market practice, on the Scheduled Payment Date (as defined in the Offer to Purchase referred to below) of $1,000 on the applicable maturity date for the Notes specified in the table below plus (b) the present value on the Scheduled Payment Date of the interest that would be payable on, or accrue from, the last interest payment date prior to the Scheduled Payment Date until the applicable maturity date for such Notes, in each case determined on the basis of a yield to such maturity date equal to the sum of (A) the yield to maturity on the applicable benchmark security specified in the table below, as calculated by Bear, Stearns & Co. Inc. in accordance with standard market practice, based on the bid-side price of such reference security as of 11:00 a.m., New York City time, on October 5, 2007, unless modified by Hilton in its sole discretion, as displayed on the page of the Bloomberg Government Pricing Monitor specified in the table below plus (B) the Applicable Spread (as shown in the table below), minus (ii) accrued and unpaid interest to, but not including, the Scheduled Payment Date.
The total consideration for each $25.00 principal amount of Bonds validly tendered and not validly withdrawn pursuant to the tender offer for the Bonds is $25.125.
The total consideration for each CLP50,000 original principal amount of CLP Notes validly tendered and not validly withdrawn pursuant to the tender offer for the CLP Notes is $119.53. The total consideration for each CLP50,000 original principal amount of CLP Notes represents a price of approximately $1,028.72 per $1,000 Adjusted Principal Amount (as defined in the CLP Notes), converted at the Observed Exchange Rate (as defined in the CLP Notes) on September 11, 2007. The foregoing translation is solely for the convenience of the holders of CLP Notes; the CLP Notes Total Consideration is fixed and will not be adjusted for exchange rate movements or changes in the Adjusted Principal Amount during the pendency of the Offer for such CLP Notes.
The total consideration for the Securities described above includes a consent payment of $30.00 per $1,000 principal amount of Notes, $1.00 per $25.00 principal amount of Bonds and $3.00 per CLP50,000 original principal amount of CLP Notes. Subject to the terms and conditions of the tender offers and the consent solicitations, the consent payment will be made on the payment date in respect of Securities validly tendered and not validly withdrawn and as to which consents to the proposed amendments are delivered at or prior to the Consent Payment Deadline. Holders of the Securities must validly tender and not validly withdraw Securities at or prior to the Consent Payment Deadline in order to be eligible to receive the applicable total consideration (which includes the applicable consent payment described in the foregoing sentence) for such Securities purchased in the tender offers. Holders who validly tender their Securities after the Consent Payment Deadline and at or prior to the Offer Expiration Date will be eligible to receive the tender offer consideration which is an amount, paid in cash, equal to the applicable total consideration less the applicable consent payment.
In each case, holders whose Securities are accepted for payment in the tender offers will receive accrued and unpaid interest in respect of such purchased Securities from the last interest payment date preceding the payment date to, but not including, such payment date.
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