CEVA Group Plc Announces Early Tender of Over 90% of Both Series of Second-Priority Notes, Upsizing of Cash Tender Offer, and Conditional Extension of Maturity of Over €590 million of Debt Held by Apollo
London, UK – 10 March 2010 – CEVA Group Plc (“CEVA”) announced today that it was pleased to report early tender results of the previously announced cash tender offer and consent solicitation for its outstanding 12% Second-Priority Senior Secured Notes due 2014 (the “12% Notes”) and 10% Second-Priority Senior Secured Notes due 2014 (the “10% Notes” and, together with the 12% Notes, the “Notes”). In addition, Apollo (as defined below) has agreed to extend the maturities on all of the debt of CEVA held by it, other than the Notes, to no earlier than June 30, 2018, concurrently with and conditioned on the consummation of the tender offer.
As of 5:00 pm, New York City time, on 9 March 2010 (the “Early Consent Deadline”), holders of Notes had properly tendered (and not validly withdrawn) the aggregate principal amount of Notes set forth in the table below. Based on the tenders received, the tender offer is oversubscribed and CEVA has received the required consents to the proposed amendments described below. As a result, CEVA has increased the maximum aggregate consideration payable in the tender offer and will purchase any and all outstanding Notes validly tendered. The price per $1,000 or €1,000 principal amount of Notes has not been amended and is set forth in the table below.
Each holder that validly tendered Notes and delivered consents to the proposed amendments prior to the Early Consent Deadline (and did not validly withdraw) shall be eligible to receive an early consent payment, which is included in the total consideration below if such Notes are accepted for purchase pursuant to the tender offer. Each holder that validly tenders Notes after the Early Consent Deadline but prior to the expiration time will be eligible to receive the tender offer consideration, which is equal to the total consideration less the early consent payment. The tender offer will expire at midnight, New York City time, on 23 March 2010, unless extended or earlier terminated. All payments for Notes validly tendered and not withdrawn on or prior to the expiration time and accepted for purchase, including the early consent payment, will be made promptly following the expiration of the tender offer. Withdrawal rights expired as of the Early Consent Deadline. Accordingly, tendered Notes may no longer be withdrawn and consents may no longer be revoked (except in limited circumstances set out in the Tender Offer Documents (as defined below)).
Title of Security
Principal
Amount
Outstanding
Principal
Amount
Tendered by Early Consent Deadline
Principal Amount to be Privately Exchanged by Apollo
Tender Offer
Consideration(1)(2)
Early Consent Payment(1)
Total
Consideration(1)(2)
10% Second-Priority Senior Secured Notes due 2014
$400,000,000
$390,300,000
$9,700,000
$950
$50
$1,000
12% Second-Priority Senior Secured Notes due 2014
$127,057,000
$87,999,703
$39,057,297
$980
$50
$1,030
12% Second-Priority Senior Secured Notes due 2014
€119,997,000
€88,536,000
€18,727,000
€980
€50
€1,030
(1) Per $1,000 principal amount of U.S. dollar-denominated Notes or per €1,000 principal amount of euro-denominated Notes, as applicable.
(2) Not including accrued and unpaid interest on the Notes, up to, but not including, the payment date, which will be paid in addition to this amount.
As of the Early Consent Deadline, CEVA had received tenders and consents from holders of (i) 100% of the outstanding principal amount of 10% Second-Priority Notes (excluding those held by its affiliates, including Apollo Management VI, L.P., the indirect controlling shareholder of CEVA, and its affiliates (“Apollo”)) and (ii) approximately 92% of the outstanding principal amount of 12% Second-Priority Notes (excluding those held by its affiliates, including Apollo), to the adoption of proposed amendments to each of the indentures governing the Notes and related collateral documents to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the indentures governing the Notes, and provide for the release of all of the liens on the collateral securing the Notes. The amendments will become operative immediately following the consummation of the tender offer.
The tender offer is expected to be financed with the proceeds from a new issuance of secured notes (the “New Junior Priority Senior Secured Notes”) having a later maturity than the maturity of the Notes. The New Junior Priority Senior Secured Notes are expected to be effectively subordinated to all of CEVA’s other secured debt, including its senior secured facilities and 11.625% senior secured notes due 2016, to the extent of the value of the assets securing such debt. The New Junior Priority Senior Secured Notes are expected to be effectively senior to all of CEVA’s unsecured debt, to the extent of the value of the assets securing such debt, including any Notes not tendered in the tender offer.
Apollo has committed to privately exchange all the Notes held by it into New Junior Priority Senior Secured Notes concurrently with the consummation of the tender offer. In the private exchange, Apollo will receive the equivalent principal amount of New Junior Priority Senior Secured Notes as if Apollo had participated in the tender offer and had received the total consideration for all of the Notes owned by it and then used those cash proceeds to participate in the offering of New Junior Priority Senior Secured Notes. Apollo currently holds approximately €19 million and $39 million of 12% Notes and $10 million of 10% Notes.
In addition, Apollo has agreed to extend the maturities on all of the debt of CEVA held by it, other than the Notes, to no earlier than June 30, 2018, concurrently with and conditioned on the consummation of the tender offer. Pursuant to a private exchange, Apollo will exchange all of the 8½% senior notes due 2014, 10% senior subordinated notes due 2016 and senior unsecured loans due 2015 held by it for a like principal amount of new senior notes, senior subordinated notes or senior unsecured loans, respectively, issued by CEVA. The extended senior notes, senior subordinated notes and senior unsecured loans will have the same terms and provisions relating to ranking, interest rate, covenants, events of default and redemption or prepayment provisions, as the senior notes, subordinated notes or senior unsecured loans, respectively, being exchanged. Apollo currently holds approximately €73 million of 8½% senior notes due 2014, €57 million of 10% senior subordinated notes due 2016 and approximately $629 million of loans due 2015 under its senior unsecured loan facility.
Full details of the terms and conditions of the tender offer are included in the Offer to Purchase and Consent Solicitation Statement dated 24 February 2010, as supplemented, and related materials (“Tender Offer Documents”). Neither CEVA nor any other person makes any recommendation as to whether holders should tender their Notes or provide the related consents, and no one has been authorized to make such a recommendation. Holders of Notes must make their own decisions as to whether to tender their Notes and provide the related consents, and if they so decide, the principal amount of Notes to tender.
Credit Suisse Securities (USA), LLC is acting as Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the tender offer or consent solicitation may be directed to Credit Suisse at (212) 325-5912 (Collect), +44 20 7883 7161 (Europe) or (800) 820-1653 (Toll Free). Holders who desire a copy of the Tender Offer Documents or the indentures related to the Notes should contact the information agent, D.F. King & Co., Inc., at (800) 431-9645 (Toll-Free) or (212) 269-5550 (Collect), or D.F. King (Europe), at +44 20 7920 9700 (Main).
This announcement shall not constitute an offer to purchase or a solicitation of an offer to sell any securities. The tender offer and consent solicitation is being made only through and subject to the terms and conditions set forth in the Tender Offer Documents. Holders of the Notes should read carefully the Tender Offer Documents before making any decision with respect to the tender offer and consent solicitation. Tender Offer Documents are being distributed to holders of Notes. The tender offer and consent solicitation is not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
As of 5:00 pm, New York City time, on 9 March 2010 (the “Early Consent Deadline”), holders of Notes had properly tendered (and not validly withdrawn) the aggregate principal amount of Notes set forth in the table below. Based on the tenders received, the tender offer is oversubscribed and CEVA has received the required consents to the proposed amendments described below. As a result, CEVA has increased the maximum aggregate consideration payable in the tender offer and will purchase any and all outstanding Notes validly tendered. The price per $1,000 or €1,000 principal amount of Notes has not been amended and is set forth in the table below.
Each holder that validly tendered Notes and delivered consents to the proposed amendments prior to the Early Consent Deadline (and did not validly withdraw) shall be eligible to receive an early consent payment, which is included in the total consideration below if such Notes are accepted for purchase pursuant to the tender offer. Each holder that validly tenders Notes after the Early Consent Deadline but prior to the expiration time will be eligible to receive the tender offer consideration, which is equal to the total consideration less the early consent payment. The tender offer will expire at midnight, New York City time, on 23 March 2010, unless extended or earlier terminated. All payments for Notes validly tendered and not withdrawn on or prior to the expiration time and accepted for purchase, including the early consent payment, will be made promptly following the expiration of the tender offer. Withdrawal rights expired as of the Early Consent Deadline. Accordingly, tendered Notes may no longer be withdrawn and consents may no longer be revoked (except in limited circumstances set out in the Tender Offer Documents (as defined below)).
Title of Security
Principal
Amount
Outstanding
Principal
Amount
Tendered by Early Consent Deadline
Principal Amount to be Privately Exchanged by Apollo
Tender Offer
Consideration(1)(2)
Early Consent Payment(1)
Total
Consideration(1)(2)
10% Second-Priority Senior Secured Notes due 2014
$400,000,000
$390,300,000
$9,700,000
$950
$50
$1,000
12% Second-Priority Senior Secured Notes due 2014
$127,057,000
$87,999,703
$39,057,297
$980
$50
$1,030
12% Second-Priority Senior Secured Notes due 2014
€119,997,000
€88,536,000
€18,727,000
€980
€50
€1,030
(1) Per $1,000 principal amount of U.S. dollar-denominated Notes or per €1,000 principal amount of euro-denominated Notes, as applicable.
(2) Not including accrued and unpaid interest on the Notes, up to, but not including, the payment date, which will be paid in addition to this amount.
As of the Early Consent Deadline, CEVA had received tenders and consents from holders of (i) 100% of the outstanding principal amount of 10% Second-Priority Notes (excluding those held by its affiliates, including Apollo Management VI, L.P., the indirect controlling shareholder of CEVA, and its affiliates (“Apollo”)) and (ii) approximately 92% of the outstanding principal amount of 12% Second-Priority Notes (excluding those held by its affiliates, including Apollo), to the adoption of proposed amendments to each of the indentures governing the Notes and related collateral documents to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the indentures governing the Notes, and provide for the release of all of the liens on the collateral securing the Notes. The amendments will become operative immediately following the consummation of the tender offer.
The tender offer is expected to be financed with the proceeds from a new issuance of secured notes (the “New Junior Priority Senior Secured Notes”) having a later maturity than the maturity of the Notes. The New Junior Priority Senior Secured Notes are expected to be effectively subordinated to all of CEVA’s other secured debt, including its senior secured facilities and 11.625% senior secured notes due 2016, to the extent of the value of the assets securing such debt. The New Junior Priority Senior Secured Notes are expected to be effectively senior to all of CEVA’s unsecured debt, to the extent of the value of the assets securing such debt, including any Notes not tendered in the tender offer.
Apollo has committed to privately exchange all the Notes held by it into New Junior Priority Senior Secured Notes concurrently with the consummation of the tender offer. In the private exchange, Apollo will receive the equivalent principal amount of New Junior Priority Senior Secured Notes as if Apollo had participated in the tender offer and had received the total consideration for all of the Notes owned by it and then used those cash proceeds to participate in the offering of New Junior Priority Senior Secured Notes. Apollo currently holds approximately €19 million and $39 million of 12% Notes and $10 million of 10% Notes.
In addition, Apollo has agreed to extend the maturities on all of the debt of CEVA held by it, other than the Notes, to no earlier than June 30, 2018, concurrently with and conditioned on the consummation of the tender offer. Pursuant to a private exchange, Apollo will exchange all of the 8½% senior notes due 2014, 10% senior subordinated notes due 2016 and senior unsecured loans due 2015 held by it for a like principal amount of new senior notes, senior subordinated notes or senior unsecured loans, respectively, issued by CEVA. The extended senior notes, senior subordinated notes and senior unsecured loans will have the same terms and provisions relating to ranking, interest rate, covenants, events of default and redemption or prepayment provisions, as the senior notes, subordinated notes or senior unsecured loans, respectively, being exchanged. Apollo currently holds approximately €73 million of 8½% senior notes due 2014, €57 million of 10% senior subordinated notes due 2016 and approximately $629 million of loans due 2015 under its senior unsecured loan facility.
Full details of the terms and conditions of the tender offer are included in the Offer to Purchase and Consent Solicitation Statement dated 24 February 2010, as supplemented, and related materials (“Tender Offer Documents”). Neither CEVA nor any other person makes any recommendation as to whether holders should tender their Notes or provide the related consents, and no one has been authorized to make such a recommendation. Holders of Notes must make their own decisions as to whether to tender their Notes and provide the related consents, and if they so decide, the principal amount of Notes to tender.
Credit Suisse Securities (USA), LLC is acting as Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the tender offer or consent solicitation may be directed to Credit Suisse at (212) 325-5912 (Collect), +44 20 7883 7161 (Europe) or (800) 820-1653 (Toll Free). Holders who desire a copy of the Tender Offer Documents or the indentures related to the Notes should contact the information agent, D.F. King & Co., Inc., at (800) 431-9645 (Toll-Free) or (212) 269-5550 (Collect), or D.F. King (Europe), at +44 20 7920 9700 (Main).
This announcement shall not constitute an offer to purchase or a solicitation of an offer to sell any securities. The tender offer and consent solicitation is being made only through and subject to the terms and conditions set forth in the Tender Offer Documents. Holders of the Notes should read carefully the Tender Offer Documents before making any decision with respect to the tender offer and consent solicitation. Tender Offer Documents are being distributed to holders of Notes. The tender offer and consent solicitation is not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.