Ball Corp. last week postponed the bank meeting for a $1.6 billion financing package backing its $880 million acquisition of Schmalbach-Lubeca, and instead will try to get the deal rolling this Wednesday. Raymond Seabrook, cfo, said the company has been juggling structures on the new deal and shuttling back and forth from meeting with Schmalbach management in Germany.
Ball hopes to close the financing and the acquisition by the end of this year to avoid added costs from Germany's capital gains tax adoption, which takes effect on the first of next year, Seabrook said. However, 2% of Schmalbach is publicly owned and a German shareholder is contesting Ball's efforts to squeeze out the company, he noted. A squeeze-out occurs when a majority shareholder with a stake exceeding 95% of the shares in a company buys out the minority shareholders. Seabrook explained that the shareholder may slow down the process in the courts and could be hinting, 'If you treat me right, I'll go away.' Seabrook, however, said he was confident the deal would close before the end of the year.
Seabrook acknowledged that the structure of the financing has been in a state of flux over the past few weeks. "We needed more of this and [then] more of that," he said, explaining why reported amounts had been inconsistent. The final financing package is a $1.6 billion deal, comprising a $500 million multi-currency revolver, a $250 million euro-denominated "A" term loan, a $350 million "B" term loan, a $300 million euro-denominated "B" term loan and a $200 million high-yield note offering. Deutsche Bank, Bank of America, BANK ONE and Lehman Brothers are leading the financing.