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CHICAGO AND NORTH WESTERN HOLDINGS PLANS INITIAL PUBLIC STOCK OFFERING

CHICAGO AND NORTH WESTERN HOLDINGS PLANS INITIAL PUBLIC STOCK OFFERING
 CHICAGO, Jan. 24 /PRNewswire/ -- Chicago and North Western Holdings Corp. announced today that it has filed a registration statement with the Securities and Exchange Commission for an initial public offering of 8,750,000 shares of its common stock. An additional 1,312,500 shares may be issued to cover underwriters' over-allotments.
 The company currently estimates that the initial public offering price will be between $19 and $21 per share. There will be approximately 36.5 million shares of common stock outstanding after the offering. The offering is expected to be made in March after SEC review.
 The public offering is part of a proposed recapitalization of the company and its subsidiaries designed to decrease interest and preferred stock dividend costs and to increase common stockholders' equity. As part of the recapitalization, Chicago and North Western Acquisition Corp., a subsidiary of the company, intends to commence a cash tender offer for approximately $260 million principal amount of its senior subordinated debentures due 2001.
 Although the offering price for the debentures has not been finalized, it is expected that holders who tender debentures prior to an initial deadline will receive approximately $1,200, plus accrued interest, for each $1,000 principal amount of debentures tendered and accepted for payment. Payment by the company for debentures tendered and not withdrawn will be subject to the availability of financing acceptable to the company. The terms and conditions of the tender offer will be described in an offer to purchase, which the company experts to mail to holders of the debentures next week.
 Also as part of the recapitalization, the company is proposing to redeem all of its outstanding exchangeable preferred stock and to exchange its preferred stock held by a subsidiary of Union Pacific Corporation for non-voting common equity. In addition, Union Pacific has entered into a letter of intent to make a further cash investment of approximately $25 million to purchase additional non-voting common equity. The aggregate non-voting common equity acquired by Union Pacific would be convertible into approximately 25 percent of the company's common stock, subject to regulatory approval if required. The investment by Union Pacific is subject to board approval.
 Financing for the recapitalization is expected to be provided by the initial public offering, the Union Pacific investment and a new $700 million bank credit facility that will replace the company's current bank facility. The company is negotiating the terms of the proposed new credit facility with a group of lenders. The recapitalization is expected to result in an extraordinary charge to 1992 earnings estimated at $58 million on an after-tax basis in connection with the termination of the existing credit facility and the repurchase of the debentures.
 The company also said today that it will take a $115 million pretax special charge in the fourth quarter of 1991. A substantial portion of this special charge will relate to the previously announced agreement with union employees that has allowed the company to reduce the size of railroad train crews.
 Chicago and North Western Holdings Corp. is the holding company for the nation's eighth largest railroad, the Chicago and North Western Transportation Company, which was acquired in a 1989 leveraged buyout led by Blackstone Capital Partners, L.P. None of the company's stockholders are selling any shares in the proposed public offering. Following the offering, Blackstone will own approximately 31 percent of the company's common equity, Union Pacific will own 25 percent, affiliates of Donaldson, Lufkin & Jenrette Securities Corporation will own 11 percent, and management investors will own 5 percent.
 Donaldson, Lufkin & Jenrette Securities Corporation, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated will act as managing underwriters for the public offering. Donaldson Lufkin and the Blackstone Group will act as dealer-managers for the tender offer.
 A registration statement relating to the shares of common stock has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement become effective. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
 -0- 1/24/92
 /CONTACT: James M. Foote, 312-559-6165, Leslie Cleveland Hague, 312-559-6124, or Kevin W. Busath, 312-633-4318, all for Chicago & Northwestern Transportation/ CO: Chicago and North Western Holdings Corp. ST: Illinois IN: FIN SU: OFR


CK -- NY035 -- 3225 01/24/92 11:02 EST
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Publication:PR Newswire
Date:Jan 24, 1992
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