SEC FILING SHOWS TJX USED $275M LOAN TO BUY MARSHALLS
NEW YORK — The TJX Cos. borrowed $375 million under a new credit agreement to finance its purchase of Marshalls from Melville Corp.
The details of the financing for the deal are included in TJX’s 10-Q filing with the Securities and Exchange Commission for the third quarter. TJX completed its acquisition of Marshalls on Nov. 17, paying $375 million in cash and $175 million in junior convertible preferred stock to Melville.
Of the preferred shares, 1.5 million shares, with a face value of $150 million, will pay an annual dividend of $7 a share, or $12 million. The other 250,000 shares, with a face value of $25 million, will pay $1.81 a share annually, or $452,500.
The $175 million in preferred will be convertible into a total of 9.4-11.7 million common shares depending on the market price of the common at the time of conversion. The $25 million issue must be converted into common stock on Nov. 17, 1996, and the larger series will be converted into common on Nov. 17, 1998.
TJX has about 72.4 million common shares outstanding. If converted, the Melville preferred would represent about 12 percent of the outstanding shares.
To finance the Marshalls purchase, TJX entered into an unsecured $875 million bank credit agreement through which the company borrowed $375 million on a term loan basis to fund the cash portion of the acquisition. — Fairchild News Service