Spin-off Nears, Lamb Weston Announces Private Note Sale
- Record Date: 5 PM, New York City time, on November 1, 2016
- Distribution Date: 11:59 PM, New York City time, on November 9, 2016
Eagle, Idaho, USA-headquartered Lamb Weston reported on October 26 that it, along with certain selling note holders, is planning to offer its senior notes due in 2024 and senior notes due 2026 in a combined aggregate principal amount of $1.666 billion in a private sale that is exempt from the registration requirements of the Securities Act of 1933. It is expected that the debt securities will be guaranteed by certain of the frozen potato products company’s material domestic subsidiaries.
Lamb Weston intends to use the net proceeds of the issuance of the notes to partially fund a cash payment to ConAgra Foods, Inc. as it is spun off as a stand-along unit in November. The company will not receive any proceeds from the sale of the notes by the selling note holders.
A press release issued by ConAgra Foods declared: “This is not an offer to sell or the solicitation of an offer to buy any securities. The notes and related guarantees are being offered only to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-US persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act. The notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.”
The record and distribution dates for the spin-off of the Lamb Weston business, which is expected to be effected through the distribution of 100 percent of the common shares of Lamb Weston to holders of ConAgra Foods’ common shares, are as follows:
The completion of the distribution remains subject to customary closing conditions, including the Securities and Exchange Commission having declared effective Lamb Weston’s Registration Statement on Form 10.
Meanwhile, ConAgra Foods recently announced that its board of directors approved an increase to its existing share repurchase program, authorizing $1.25 billion of total expenditures on the program. The authorization is contingent on the completion of the spin-off of the Lamb Weston business and has no expiration date. Shares are expected to be repurchased periodically, depending on market conditions and other factors, through open market or privately negotiated transactions. This authorization is part of a broader capital allocation strategy that balances debt reduction, a top-tier dividend, share repurchases and strategic growth investments.