The J.M. Smucker Company has announced the pricing terms for its previously disclosed cash tender offers (each referred to as an “Offer” and collectively, the “Offers”) to purchase up to $300 million aggregate purchase price of its outstanding notes. This purchase amount excludes accrued and unpaid interest and is referred to as the “Offer Cap.” The Offers involve the Company’s validly tendered (and not withdrawn) notes as detailed below, following a “waterfall” acceptance methodology. This approach prioritizes the purchase of notes based on their designated acceptance priority levels, as outlined in the table accompanying the Offer to Purchase, dated December 3, 2024 (the “Offer to Purchase”).
As of 10:00 a.m. New York City time on December 17, 2024 (the “Price Determination Time”), the Company expects to purchase the full amount of its 2.750% Senior Notes due 2041 (Acceptance Priority Level 1), the full amount of its 3.550% Senior Notes due 2050 (Acceptance Priority Level 2), and a portion of its 2.125% Senior Notes due 2032 (Acceptance Priority Level 3). The proration factor for the 2032 notes is approximately 69.9%, ensuring the total purchase amount does not exceed the $300 million Offer Cap. The Company will not purchase any of its 4.375% Senior Notes due 2045 (Acceptance Priority Level 4) or its 5.900% Senior Notes due 2028 (Acceptance Priority Level 5).
The “Total Consideration” for the notes tendered and accepted includes an early tender premium of $30 per $1,000 principal amount of notes. This premium applies to notes validly tendered and not withdrawn by 5:00 p.m. New York City time on December 16, 2024 (the “Early Tender Time”) and does not represent an additional payment. Holders of accepted notes will also receive accrued and unpaid interest up to, but not including, December 19, 2024 (the “Early Settlement Date”).
The Total Consideration is calculated by referencing a fixed spread for each note against the yield to maturity of the applicable U.S. Treasury Security. These yields were determined at the Price Determination Time and are outlined in the Offer to Purchase. The Company expects to satisfy all conditions of the Offers and plans to settle $300 million in aggregate purchase price for the validly tendered notes on the Early Settlement Date.
Since the aggregate purchase price of notes validly tendered before the Early Tender Time exceeded the Offer Cap, the Company will not conduct a final settlement. As a result, no notes tendered after the Early Tender Time will be accepted. Notes not purchased by December 19, 2024, will be promptly returned to their holders.
It is important to note that this press release does not constitute an offer to purchase or a solicitation to sell securities. The Offers are being conducted solely under the terms outlined in the Offer to Purchase. Additionally, no offer, solicitation, or purchase will occur in jurisdictions where such actions are deemed unlawful.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are serving as Dealer Managers for the Offers. Holders with questions about the Offers can contact Goldman Sachs at (800) 828-3182 (toll-free) or (212) 357-1452 (collect), or J.P. Morgan at (866) 834-4666 (toll-free) or (212) 834-3554 (collect). For copies of the Offer to Purchase and related documents, holders can reach out to D.F. King & Co., Inc., the Tender Agent and Information Agent, at Banks and brokers can call (212) 269-5550, while others can call toll-free at (866) 620-2535.
This announcement provides clarity on the Company’s intent to repurchase its notes, adhering to a structured process and respecting the Offer Cap. Through these Offers, J.M. Smucker aims to manage its outstanding debt effectively, prioritizing notes based on predefined acceptance levels. The use of a waterfall methodology ensures an orderly process, balancing the Company’s financial goals with fairness to noteholders.
Looking ahead, while the Offers officially remain open until January 2, 2025, the Company’s decision not to accept additional notes due to exceeding the Offer Cap underscores the importance of the Early Tender Time for participation. This approach reflects the Company’s focus on maintaining a transparent and well-structured debt management strategy.
In conclusion, J.M. Smucker’s announcement emphasizes its commitment to financial discipline and proactive management of its debt portfolio. By adhering to the terms of the Offer to Purchase and engaging leading financial institutions to facilitate the process, the Company demonstrates its dedication to upholding its financial obligations while creating value for stakeholders. Noteholders are encouraged to review the Offer to Purchase thoroughly and contact the relevant Dealer Managers or Tender Agent for further information.
