DALLAS, DEC. 8 -- Southland Corp. shareholders today approved a $4.9 billion leveraged buyout, putting the nation's largest convenience store chain in private hands.
The buyout by the company's founding Thompson family is expected to be closed next Tuesday, said Southland spokeswoman Markeeta McNatt.
The approval followed the pricing of $2.2 billion in high-yield, high-risk "junk bonds." The buyout also involves bank loans of $2.6 billion, McNatt said.
About 150 people attended today's 10-minute shareholders meeting, the fifth concerning the sale of the Dallas-based corporation that owns the 7-Eleven convenience store chain. The four previous meetings were adjourned without action because of difficulty in pricing the bonds due to the turmoil in the stock market since the Oct. 19 collapse.
On Monday, Goldman, Sachs & Co. and Salomon Brothers Inc. said they successfully priced $2.2 billion in junk bonds needed to complete financing.
Sale of the bonds, which will yield as much as 18 percent interest, were announced today, McNatt said. The company will receive $1.5 billion from the bond sale.
Members of the Thompson family controlled 73 percent of the common shares going into today's meeting, after acquiring them this summer through the purchase of 66 percent of stock outstanding. The family also bought 97 percent of outstanding preferred shares through a tender offer this summer.
Each outstanding share of Southland common stock will be converted to the right to receive $61.32 in cash and 0.6672 of a share of a new series of preferred stock. Each share of a series of Southland's preferred stock will be canceled and exchanged for the right to receive $90.27 in cash, the company said.
The successful bond issue is expected to provide a major lift to the junk bond market, which has virtually ground to a halt since the stock market collapse. Goldman Sachs and Salomon Brothers had struggled for more than a month to find buyers for the debt.
The offering, which was amended three times, had met resistance from investors who worried that the value of the company's assets have fallen after the stock market collapse and that the company would be unable to pay off the debt.
Indications Monday that Southland would be successful in completing its financing caused its shares to rise $5 on the New York Stock Exchange, closing at $67. It rose 25 cents today, closing at $67.25.
Southland is the nation's largest convenience retailer, with 8,296 7-Eleven and other convenience stores, five Southland distribution centers and the Southland Foods Division. Southland also owns a 50 percent interest in Citgo Petroleum Corp.
Southland said it also was proceeding with plans to sell about 1,000 7-Eleven stores, its Dairies Group, Chief Auto Parts, Tidel Systems, Snack Foods Division, Reddy Ice, Southland Chemical-Food Labs and MovieQuik.