MSC Industrial Direct (MSM) – Odd Lot Tender Offer – no upside currently

Current Price – $72.53;

Offer Price – $66 – $72.5;

Upside – no upside currently;

Expiration date –  4 August 2016;

Offer is subject to financing conditions!

No proration for holders of less than 100 shares

SEC Filling

 

 

Summary:

MSC Industrial Direct is offering to purchase for cash shares of its Class A common stock, par value $0.001 per share pursuant to (i) auction tenders at prices specified by the tendering shareholders of not less than $66.00 and not more than $72.50 per share. We are offering to purchase shares having an aggregate purchase price of no more than $300.0 million. Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $66.00 per share, the minimum Purchase Price pursuant to the Offer, we would purchase 4,545,454 shares pursuant to the Offer, which would represent approximately 7.4% of our outstanding common stock as of June 30, 2016. Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $72.50 per share, the maximum Purchase Price pursuant to the Offer, we would purchase 4,137,931 shares pursuant to the Offer, which would represent approximately 6.7% of our outstanding common stock as of June 30, 2016.

 

Odd lot holders

If you own, beneficially or of record, fewer than 100 shares in the aggregate, you validly tender all of these shares at or below the Purchase Price prior to the Expiration Time (and do not validly withdraw such shares) and you complete the section entitled “Odd Lots” in the Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery, and all conditions to the Offer are satisfied or waived, we will purchase all of your shares without subjecting them to proration.

 

Source and amount of funds

The maximum aggregate purchase price for the shares purchased in the Offer will be $300.0 million. In addition, assuming that the Offer is fully subscribed, the aggregate purchase price for the shares purchased pursuant to the Purchase Agreement is anticipated to be approximately $90.0 million. We expect to fund the purchase of shares pursuant to the Offer and the Purchase Agreement with (i) net proceeds from our issuance and sale of $175.0 million in aggregate principal amount of the Senior Notes (as defined below) in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended, and (ii) the borrowing of $215.0 million under the revolving credit facility that is part of the Credit Facility (as defined below). The Offer is subject to our satisfaction or waiver of the Financing Condition, which is one of the conditions to the Offer described in Section 7. This means that if we are not able to complete the issuance and sale of $175.0 million in aggregate principal amount of the Senior Notes and receive the net proceeds therefrom, we will not be required to close the Offer.