The J.M. Smucker Company has announced the pricing terms for its previously declared cash tender offers (referred to as “Offers”) to purchase up to $300 million in aggregate purchase price of the company’s outstanding notes, excluding accrued and unpaid interest. These offers are structured under a “waterfall” methodology that prioritizes the acceptance of certain notes based on their designated Acceptance Priority Levels. This announcement, made pursuant to the Offer to Purchase dated December 3, 2024, details the terms and procedures of these Offers, which include the purchase of specific notes validly tendered (and not withdrawn) as outlined below.
Breakdown of Acceptance Priority Levels and Notes
As of 10:00 a.m. New York City time, on December 17, 2024 (referred to as the “Price Determination Time”), the company has outlined the following terms:
- 2.750% Senior Notes due 2041: These notes, with an Acceptance Priority Level of 1, will be fully accepted for purchase.
- 3.550% Senior Notes due 2050: These notes, holding an Acceptance Priority Level of 2, will also be fully accepted for purchase.
- 2.125% Senior Notes due 2032: With an Acceptance Priority Level of 3, these notes will be partially accepted on a prorated basis. The proration factor applied is approximately 69.9%, ensuring the total purchase amount does not exceed the $300 million Offer Cap.
- 4.375% Senior Notes due 2045 and 5.900% Senior Notes due 2028: These notes, with Acceptance Priority Levels 4 and 5, respectively, will not be accepted for purchase due to the cap being reached with higher-priority notes.
Pricing and Settlement Details
Holders of the notes validly tendered and not withdrawn by the Early Tender Time (5:00 p.m. New York City time, December 16, 2024) will receive a “Total Consideration” that includes an early tender premium of $30 per $1,000 principal amount. This premium does not represent an additional or increased payment but is included within the total payment.
In addition to the Total Consideration, holders will also receive accrued and unpaid interest up to, but excluding, December 19, 2024, which is the Early Settlement Date. The Total Consideration for each note was calculated by referencing a fixed spread over the yield to maturity of the corresponding U.S. Treasury Security
arly Tender Results and Final Settlement
Given that the total purchase price of the notes tendered before the Early Tender Time exceeded the $300 million Offer Cap, the Offers will not extend to a Final Settlement Date. Therefore, any notes tendered after the Early Tender Time will not be accepted for purchase. These notes will be returned to their holders promptly following the Early Settlement Date of December 19, 2024.
The Offers are set to officially expire at 5:00 p.m. New York City time on January 2, 2025, unless extended or terminated. However, as the Offer Cap has already been met with early tenders, no further action will be taken beyond the Early Settlement Date.
The J.M. Smucker Company Releases Pricing Details for Cash Tender Offers
Key Conditions and Disclaimer
All conditions of the Offers were either satisfied or waived by the company, confirming the acceptance and processing of the tenders within the Offer Cap limit. It is important to note that this announcement does not constitute an offer to purchase or sell securities in any jurisdiction where such an action would be unlawful. The Offers are strictly governed by the terms and conditions outlined in the Offer to Purchase.
Role of Dealer Managers and Tender Agent
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC have been appointed as Dealer Managers for these Offers. Interested parties with inquiries regarding the Offers can reach Goldman Sachs at (800) 828-3182 (toll-free) or (212) 357-1452 (collect) and J.P. Morgan at (866) 834-4666 (toll-free) or (212) 834-3554 (collect).
The company has also designated D.F. King & Co., Inc. as the Tender Agent and Information Agent for the Offers. Requests for additional information, including the Offer to Purchase and related documents, can be directed to D.F. King via email at or through phone lines dedicated to banks and brokers at (212) 269-5550 or toll-free for all others at (866) 620-2535.
Strategic Financial Management
This tender offer reflects J.M. Smucker Company’s strategic approach to financial management. By prioritizing the repurchase of long-term debt with higher acceptance levels, the company demonstrates its focus on optimizing its capital structure. The early tender premium serves as an incentive for noteholders to participate promptly, facilitating the efficient allocation of available funds within the Offer Cap.
Summary
The J.M. Smucker Company’s cash tender offers represent a significant financial transaction aimed at managing the company’s outstanding debt effectively. By adhering to a transparent and structured process, the company has ensured fair participation and compliance with regulatory guidelines. The settlement of these Offers, scheduled for December 19, 2024, marks a proactive step toward reinforcing the company’s fiscal stability and long-term growth objectives.
