Cincinnati, 6 Nov - The Procter & Gamble Company today announced the preliminary results of its exchange offer for P&G common stock in connection with the separation of P&G's Folgers coffee subsidiary and the closing of the previously announced merger of Folgers and The J. M. Smucker Company.
In the exchange offer, P&G shareholders had the option to exchange some, none or all of their shares of P&G common stock for shares of Folgers common stock, which, prior to the merger, was a wholly owned subsidiary of P&G. Following the merger, each share of Folgers common stock automatically converted into the right to receive one Smucker common share.
Exchange Offer Results
Pursuant to the exchange offer, which expired at 12:00 midnight, New York City time, on November 5, 2008, P&G announced that it has accepted 38,652,878 shares of P&G common stock for 63,166,532 shares of Folgers common stock.
Based on a preliminary count by the exchange agent, a total of 484,864,100 shares of P&G common stock were validly tendered and not withdrawn prior to the expiration of the exchange offer, including 231,260,800 shares tendered pursuant to guaranteed delivery procedures. The total shares tendered includes an estimated 487,293 shares of P&G common stock tendered by odd-lot shareholders not subject to proration.
Based on the total number of shares of P&G common stock reported to be tendered and not withdrawn prior to the expiration of the exchange offer, the preliminary proration factor is approximately 7.88%.
P&G will not be able to determine the final proration factor until the delivery of shares of P&G common stock tendered by guaranteed delivery is completed, which P&G expects to be the close of business on November 10, 2008. P&G will publicly announce the final proration factor after it has been determined, which may be different from today's preliminary estimate. At that time, P&G will also announce the exact amount of the after-tax gain from the transaction.
Because more than 38,652,878 shares of P&G common stock were tendered, all shares of Folgers common stock owned by P&G will be exchanged in the offer, and no shares of Folgers common stock will be distributed as a pro rata dividend.
Morgan Stanley & Co. Incorporated served as the dealer manager for the exchange offer.
Closing of the Folgers Merger
In connection with the exchange offer, P&G also announced the closing of the merger of Folgers with Smucker, pursuant to which a Smucker subsidiary merged with and into Folgers, with Folgers surviving as a wholly owned subsidiary of Smucker. The Smucker common shares issued in the Folgers merger represent approximately 53.5 percent of the Smucker common shares that are outstanding after the merger.