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Apollo Funds Launch Tender Offer for US Retailer The Fresh Market
Monday 28 March 2016

28 March 2016 - Certain funds affiliated with US-based alternative investment manager Apollo Global Management, LLC (NYSE: APO) have launched a cash tender offer to purchase all of the outstanding shares of common stock of US-based specialty grocery retailer The Fresh Market, Inc. (NASDAQ: TFM), Apollo said.

The tender offer is being made pursuant to the merger agreement announced by Apollo and The Fresh Market on 14 March 2016 under which certain funds affiliated with Apollo, a leading global alternative investment manager, and certain other investors will acquire The Fresh Market for approximately USD 1.36 bn.

Apollo said that the USD 28.50 per share all-cash offer represents a premium of approximately 24% over The Fresh Market's closing share price on 11 March 2016, and a premium of approximately 53% over the 10 February 2016 closing share price, the day prior to press speculation regarding a potential transaction.

This deal follows a review of strategic alternatives undertaken by The Fresh Market board of directors to maximize stockholder value.

The deal was unanimously approved by the board of directors of The Fresh Market, other than Ray Berry, chairman and founder of The Fresh Market, who recused himself from all board discussions related to the review and from the board vote approving the transaction.

Ray Berry and Brett Berry, who collectively own approximately 9.8% of The Fresh Market's outstanding shares, have agreed not to tender shares held by them into the tender offer and will both participate and rollover the vast majority of their holdings in the transaction with Apollo.

In addition, George Golleher, with whom Apollo has had a long-term operating partner consulting relationship and who was formerly chief executive officer of Smart and Final and Ralphs Grocery company/Food-4-Less during ownership by other Apollo affiliated funds, will be a co-investor with the Apollo funds in the transaction.

The transaction which is expected to close in 2Q16 is conditioned upon satisfaction of the minimum tender condition which requires that shares representing more than 50% of the company's common shares (other than shares held by Ray and Brett Berry that are being rolled over) be tendered, the receipt of approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.

Under the terms of the merger agreement, the company may actively solicit alternative acquisition proposals during a 21-day period following the execution date of the definitive agreement, continuing until midnight on 1 April 2016.

Apollo said that the transaction has fully committed financing in place. It will be financed primarily through the incurrence of USD 800m in new senior secured notes and an equity contribution of approximately USD 525m from funds managed by Apollo in addition to the equity rollover from the Berrys.

The Fresh Market will also enter into a new USD 100m revolving credit facility concurrently with the closing of the merger.

Founded by Ray Berry in 1982, The Fresh Market, Inc. is a specialty grocery retailer focused on providing high-quality products in a unique and inviting atmosphere with a high level of customer service.

As of 14 March 2016, the company operates 186 stores in 27 states across the United States.

J.P. Morgan Securities LLC is serving as the exclusive financial advisor to The Fresh Market, and Cravath, Swaine and Moore LLP and Richards, Layton and Finger, P.A. are serving as its legal advisors. Barclays, RBC Capital Markets, LLC, Jefferies and Macquarie Capital are serving as financial advisors to Apollo.

The debt financing is being committed to by Barclays, Royal Bank of Canada, Jefferies Finance and Macquarie, and Davis Polk and Wardwell LLP is serving as their legal counsel.

Morgan, Lewis and Bockius LLP and Morris, Nichols, Arsht and Tunnell LLP are acting as legal advisors to Apollo and Paul, Weiss, Rifkind, Wharton and Garrison LLP is acting as legal advisor to Apollo as it relates to the debt financing.
Details
Date Published: 28/03/2016
Target: The Fresh Market, Inc
Country: USA
Deal Size: 1.36bn (USD)
Sector: Wholesale/Retail
Type: LBO
Financing: Cash
Status: Agreed
Vendor:
Buyer: Apollo Global Management
Buyer Advisor: Barclays , RBC Capital Markets, LLC , Jefferies , Macquarie Capital , Morgan, Lewis and Bockius LLP , Morris, Nichols, Arsht and Tunnell LLP , Paul, Weiss, Rifkind, Wharton and Garrison LLP
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