Cantor Morning News | Event Driven

BACKGROUND: Company A, who is affiliated with a portfolio company in the packaging business, called PTV 2/9/10, offered $30.50 on 3/17, raised to $33 on 3/13 and PTV said this did not reflect a value sufficient to hold talks. A raised to $35 on 5/3 and PTV agreed to allow A to perform due diligence. WSJ article 5/17 caused 5 financial and 3 strategic companies to contact PTV. Reynolds indicated mid-$30’s range, PE Party B (also affiliated /w a portfolio packaging business) indicated $35 but bowed out 7/12. On 8/6, A offered $35 subject to financing or, if A could not get financing, $30 + $5 worth of 10-yr sr. unsecured notes with a 13% coupon – both with $100mm reverse term fees for a financing failure. It also offered for PTV to buy its portfolio company for stock. Reynolds offered $33 which would expire if no exclusivity arrangement signed by 8/10. PTV was concerned that A could not get financing even though it had been looking for some time. On 8/9, PTV asked for $34 and Rank said $33.25 best and final. PTV signed exclusivity on 8/11.

PRICE: According to proxy, PTV believes Rank is paying 8.5x EV/LTM EBITDA, 8x ’01 and 7.3x ’11.

FINANCING: up to $2b equity from Rank + up to $3.5b secured bridge loans (reduced by sale of secured notes) + $1.5b unsecured bridge loans (reduced by sale of unsecured notes).

REGULATORY: HSR filed 8/23 (exp 9/22). Will file Austria, Germany & Mexico.

**We believe Company A is Apollo (portfolio company is Berry Plastics). We are not sure about Company B but it has been suggested that it may be Blackstone (portfolio company is publicly traded GRM). Although the $35 bid was significantly higher than $33.25, the lack of certainty in financing led PTV to accept a lower bid from Rank(Reynolds).

Active Names

PTV, COGT, PSYS, ACF, GENZ, PAR, UNCA, MFE, ARG, NTY, ARG options, POT options, GENZ options.

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