YORK, Pa., June 17, 2011 /PRNewswire/ -- Graham Packaging
Company Inc. (NYSE: GRM) today announced the signing of a
definitive merger agreement, and an amendment thereto, under which
Graham Packaging will be acquired by Reynolds Group Holdings
Limited in an all-cash transaction for $25.50 per share, or a total of approximately
$4.5 billion including assumed
indebtedness. The deal is expected to close in the second
half of this year. Reynolds intends to finance the payment of the
purchase price through fully committed financing and cash on hand
at Reynolds.
Graham Packaging also announced today that it has terminated the
previously announced merger agreement with Silgan Holdings Inc.
(Nasdaq: SLGN), following the notice provided to Silgan on
June 13, 2011 of its Board of
Directors' determination and intent to change its recommendation
with respect to the transaction with Silgan and to terminate that
agreement to enter into a binding agreement with Reynolds upon the
expiration of a three business day match-right period. Graham
Packaging's Board of Directors has determined in good faith, upon
the recommendation of its special committee and after consultation
with its financial advisor and outside legal counsel, that the
transaction with Reynolds constitutes a superior proposal as
compared to the transaction with Silgan even after taking into
account certain adjustments to the terms thereof proposed by Silgan
during the match-right period. As a consequence of this
determination, Graham Packaging's Board of Directors has withdrawn
its recommendation with respect to the merger agreement with
Silgan. Graham Packaging is paying Silgan a $39.5 million termination fee in accordance with
the terms of that agreement.
Terms of the Agreement
Under the terms of the merger agreement with Reynolds, as
amended, each outstanding share of Graham Packaging common stock
will be converted into the right to receive $25.50 in cash, subject to the terms of the
merger agreement. No approval by Reynolds stockholders is
required.
At the closing of the merger, the surviving corporation will be
making an aggregate cash payment of $245
million pursuant to contractual change in control provisions
in the Company's income tax receivable agreements with Blackstone
Capital Partners III L.P. and the Graham family. These
agreements were entered into prior to Graham Packaging's
February 2010 IPO, and reference is
made to the Company's prior public filings for further information
concerning such agreements.
Consummation of the transaction is subject to customary closing
conditions, including the receipt of domestic and foreign
regulatory approvals. Blackstone Capital Partners III
Merchant Banking Fund L.P., Blackstone Offshore Capital Partners
III L.P. and Blackstone Family Investment Partnership III L.P. have
executed a written consent to approve the transaction, thereby
providing the required stockholder approval for this transaction.
No further action by other stockholders of Graham Packaging
is required to approve the transaction.
The merger agreement was unanimously recommended by a special
committee of the Graham Packaging Board of Directors and was then
unanimously approved by Graham Packaging's full Board of Directors.
Under the terms of the amendment to the merger agreement, the
merger consideration was increased from $25.00 to $25.50 in cash per share of Graham
Packaging common stock, in consideration of a material shortening
of the deadline for delivery of Blackstone's written consent
approving the merger.
When the merger is completed, Graham Packaging Company L.P.,
which is the issuer of various series of notes, will merge with and
into the surviving corporation in the merger, which corporation
will succeed to such issuer's obligations under such
indebtedness.
Advisors
Simpson Thacher & Bartlett LLP served as legal counsel to
Graham Packaging. Abrams & Bayliss LLP acted as legal
advisor and J.P. Morgan Securities, LLC acted as financial advisor
to the special committee of the board of directors of Graham
Packaging.
About Graham Packaging
Graham Packaging is a leading U.S. supplier of plastic
containers for hot-fill juice and juice drinks, sports drinks,
drinkable yogurt and smoothies, nutritional supplements, wide-mouth
food, dressings, condiments and beers; the leading global supplier
of plastic containers for yogurt drinks; a leading supplier of
plastic containers for liquid fabric care products, dish care
products and hard-surface cleaners; and the leading supplier in the
U.S., Canada and Brazil of one-quart/liter plastic motor oil
containers. Graham Packaging proforma net sales (after taking into
account the acquisition of Liquid Container in September 2010), approximates $2.8 billion. The company employs over
8,300 associates in 15 countries through 97 manufacturing
facilities.
Additional Information and Where to Find It:
In connection with the proposed merger transaction involving
Reynolds and Graham Packaging, Graham Packaging will prepare an
information statement for the stockholders of Graham Packaging to
be filed with the Securities and Exchange Commission (the "SEC"),
and will mail the information statement to its stockholders and
file other documents regarding the proposed transaction with the
SEC as well. Graham Packaging urges investors and
stockholders to read the information statement when it becomes
available, as well as other documents filed with the SEC, because
they will contain important information. Investors and security
holders will be able to receive the information statement and other
documents free of charge at the SEC's web site, http://www.sec.gov
or from Graham at 2401 Pleasant Valley Road, York, PA 17402.
Participants in Solicitation:
Graham Packaging and its directors and executive officers and
other members of management and employees may be deemed to be
participants in the solicitation of proxies from the stockholders
of Graham Packaging in favor of the merger. Information regarding
the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of the stockholders of Graham
Packaging in connection with the proposed merger will be set forth
in the proxy statement when it is filed with the SEC. You can find
more information about Graham Packaging's executive officers and
directors in its definitive proxy statement for its 2010 annual
meeting of stockholders, which was filed with the SEC on
April 30, 2010. You can obtain free
copies of these documents from Graham using the contact information
above.
Forward Looking Statements:
Information provided and statements contained in this press
release that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, Section 21E of the Securities Exchange Act of 1934 and the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements only speak as of the date of this press
release, and Reynolds and Graham Packaging assume no obligation to
update the information included in this press release. Such
forward-looking statements include information concerning Reynolds'
or Graham Packaging's possible or assumed future results of
operations. These statements often include words such as
"approximately," "believe," "expect," "anticipate," "intend,"
"plan," "estimate" or similar expressions and may include, but are
not limited to, statements about the benefits of the proposed
merger between Reynolds and Graham Packaging, including future
financial and operating results, the combined company's plans,
objectives, expectations and intentions and other statements that
are not historical fact. These forward-looking statements are not
historical facts, and are based on current expectations, estimates
and projections about Reynolds' and Graham Packaging's industry,
management's beliefs and certain assumptions made by management,
many of which, by their nature, are inherently uncertain and beyond
Reynolds' and Graham Packaging's control. Accordingly, readers are
cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict,
including, without limitation, the expected closing date of the
transaction; the possibility that the expected synergies and value
creation from the proposed merger will not be realized, or will not
be realized within the expected time period; the risk that the
businesses will not be integrated successfully; disruption from the
merger making it more difficult to maintain business and
operational relationships; the risk that unexpected costs will be
incurred; changes in economic conditions, political conditions,
trade protection measures, licensing requirements and tax matters
in the foreign countries in which Reynolds and Graham Packaging do
business; the possibility that the merger does not close,
including, but not limited to, due to the failure to satisfy the
closing conditions; the risk that a regulatory approval may
be obtained subject to conditions; the risk that financing for the
transaction may not be available on favorable terms; and Reynolds'
and Graham Packaging's ability to accurately predict future market
conditions. Additional factors that could cause results to
differ materially from those described in the forward-looking
statements can be found in Graham Packaging's 2010 Annual Report on
Form 10-K and other filings with the SEC available at the SEC's
website (http://www.sec.gov). Although Reynolds and Graham
Packaging believe that the expectations reflected in such
forward-looking statements are reasonable as of the date made,
expectations may prove to have been materially different from the
results expressed or implied by such forward-looking statements.
Unless otherwise required by law, Reynolds and Graham Packaging
also disclaim any obligation to update their view of any such risks
or uncertainties or to announce publicly the result of any
revisions to the forward-looking statements made in this press
release.
Graham Packaging:
David Bullock
Chief Financial Officer
(717) 849-8500
Jeff Grossman
(717) 771-3220
InvestorRelations@grahampackaging.com
SOURCE Graham Packaging Company Inc.