Archer Daniels Midland Company (NYSE: ADM) today announced the pricing
of $1.150 billion principal amount of Convertible Senior Notes due 2014.
The notes are being sold in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended (the “Securities Act”).
The notes will pay interest semi-annually at a rate of 0.875 percent per
annum. The notes will be convertible, at the holder’s option, at an
initial conversion rate of 22.8343 shares per $1,000 principal amount of
notes, which represents a 22.50 percent conversion premium based on the
last reported sale price of $35.75 per share of ADM's common stock on
February 15, 2007. The notes will be convertible under certain
circumstances. Upon conversion, holders will receive cash up to the
principal amount, and any excess conversion value will be delivered, at
ADM's election, in cash, common stock or a combination of cash and
ADM estimates that the net proceeds from this offering will be
approximately $1.134 billion after deducting estimated discounts,
commissions and expenses.
ADM expects to use the net proceeds from the offering and the proceeds
of the warrant transactions referred to below to repurchase
approximately $370 million worth of shares of its common stock
contemporaneously with the closing of the sale of the notes. In
addition, approximately $299 million of the proceeds from the
transactions will be used to fund convertible note hedge transactions
that ADM expects to enter into with one
or more of the initial purchasers of the notes and/or their affiliates.
Any remaining proceeds from the offering will be added to ADM’s working
capital and will be used for general corporate purposes.
The convertible note hedge transactions are intended to reduce the
dilution to ADM’s common stock upon potential future conversion of the
notes. The convertible note hedge transactions will have an exercise
price equal to the conversion price of the notes.
In addition, ADM expects to enter into separate warrant transactions
with one or more of the initial purchasers and/or their affiliates.
These transactions will generally have the effect of increasing the
conversion price of the notes. The warrants associated with the notes
have an exercise price that is 75 percent higher than the closing price
of ADM’s stock on February 15, 2007.
This notice does not constitute an offer to sell or the solicitation of
an offer to buy securities. Any offers of the securities will be made
only by means of a private offering memorandum. The securities and the
shares of ADM common stock issuable upon conversion or exercise of the
notes have not been, and will not be, registered under the Securities
Act or the securities laws of any other jurisdiction and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
About Archer Daniels Midland Company
Archer Daniels Midland Company (ADM) is the world leader in BioEnergy
and has a premier position in the agricultural processing value chain.
ADM is one of the world’s largest processors of soybeans, corn, wheat
and cocoa. ADM is a leading manufacturer of biodiesel, ethanol, soybean
oil and meal, corn sweeteners, flour and other value-added food and feed
ingredients. Headquartered in Decatur, Illinois, ADM has over 26,000
employees, more than 240 processing plants and net sales for the fiscal
year ended June 30, 2006 of $37 billion. Additional information can be
found on ADM’s Web site at http://www.adm.com/.
This press release includes forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, that
are subject to risks, uncertainties and other factors, including
satisfaction of the closing conditions contained in the purchase
agreement between ADM and the initial purchaser, which include a
condition that there be no material adverse effect on ADM’s business
prior to the closing of the offering and other conditions in whole or in
part beyond ADM’s control. These risks, uncertainties and other factors
could cause actual results to differ materially from those referred to
in the forward-looking statements. The reader is cautioned not to rely
on these forward-looking statements. Other risks that could impact the
offering are described in detail in the ADM Annual Report on Form 10-K
for the year ended June 30, 2006 as filed with the U.S. Securities and
Exchange Commission. All forward-looking statements are based on
information currently available to ADM and ADM assumes no obligation to
update any such forward-looking statements.
ADM Media Relations