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The tender offer is being conducted in connection with the previouslyannounced separation of the two primary operating companies of HillenbrandIndustries, Hill-Rom, the Company's medical technology business, andBatesville Casket, the Company's funeral service business. The separation isexpected to be completed at the end of the Company's second fiscal quarter.
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To accomplish the separation, the Company will distribute all of thecommon stock of Batesville Holdings, Inc., a newly formed holding company forthe Company's funeral service business, to the Company's shareholders on a prorata basis. The tender offer is part of the Company's plan to establishappropriate capital structures for each of the separated companies. TheCompany expects to fund the purchase of notes tendered in the tender offerwith cash on hand and/or with the proceeds of a payment to be made byBatesville Holdings to the Company immediately prior to the completion of thedistribution as a cash dividend and/or as a repayment of outstanding notespayable to the Company. The tender offer is conditioned on the completion ofthe separation, but the separation is not conditioned on completion of thetender offer.
OFFERING TERMS
The tender offer is scheduled to expire at 8 a.m., New York City time, onMarch 31, 2008, unless extended or earlier terminated. Holders of notes musttender and not withdraw their notes on or before the early tender date, whichis 5 p.m., New York City time, on March 13, 2008, unless extended, to receivethe full tender offer consideration. Holders of notes who tender their notesafter the early tender date will receive the late tender offer consideration,which is the full tender offer consideration minus the early tender premium of$20.00 per $1,000 principal amount of notes.
The full tender offer consideration for each $1,000 principal amount ofthe notes tendered and accepted for purchase will be determined in the mannerdescribed in the Offer to Purchase by reference to the fixed spread of 75basis points over the yield based on the bid side price of the referencetreasury security, the 2.000 percent U.S. Treasury Notes due February 28,2010, as calculated by Citi and Goldman, Sachs & Co., the dealer managers forthe tender offer, at 2 p.m., New York City time, on March 26, 2008.
In addition to the full tender offer consideration or late tender offerconsideration, as applicable, holders of notes tendered and accepted forpayment will receive accrued and unpaid interest on the notes from the lastinterest payment date for the notes to, but not including, the settlementdate. The settlement date will be promptly after the expiration date, and isexpected to occur no later than April 1, 2008.
Except as set forth in the Offer to Purchase or as required by applicablelaw, notes tendered may be withdrawn only on or before the withdrawal date,which is 5 p.m., New York City time, on March 13, 2008, and notes tenderedafter the withdrawal date may not be withdrawn.
The tender offer is conditioned on the satisfaction of certain conditionsdescribed in the Offer to Purchase, including the consummation of thedistribution to the Company's shareholders of all of the shares of BatesvilleHoldings common stock. If any condition is not satisfied, the Company is notobligated to accept for purchase, or to pay for, notes tendered and mayterminate, extend or amend the tender off
