Dakota Growers Pasta tenders up to 3.9 million shares

by Eric Schroeder
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CARRINGTON, N.D. — Dakota Growers Pasta Company, Inc. has filed documents with the Securities and Exchange Commission for a tender offer of up to 3,920,000 shares of its common stock, or approximately 29.8% of its 13,169,382 shares currently outstanding, at a purchase price of $10 per share.

Dakota Growers said it has not yet mailed any tender offer documents to its shareholders and is currently finalizing the tender offer documents for distribution. The company intends to begin the tender offer as promptly as possible.

The filing follows Dakota Growers’ announcement in December that it would undertake several initiatives as an additional way to provide liquidity to shareholders.

The company said the tender offer is an integral part of, and a condition to, the investment by MVC Capital, Inc. and La Bella Holdings, L.L.C. Under Dakota Growers’ stock purchase agreement with MVC and La Bella Holdings, the company has agreed to issue up to 1 million shares of Series F nonvoting convertible preferred stock to MVC and up to 1 million shares of common stock to La Bella Holdings at a purchase price of $10 per share for aggregate gross proceeds of up to $20 million.

The total amount of shares that MVC and La Bella Holdings purchase depends on the number of shares purchased by Dakota Growers in the tender offer. The company said it will fund the purchase of shares of its common stock pursuant to the tender offer and the payment of related fees and expenses from the equity investment by MVC and La Bella Holdings and a term loan with CoBank for $20 million.

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