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Avery Dennison Prices $400 Million 7.875% Corporate HiMEDS Units Offering

Press release from the issuing company

November 14, 2007 - PASADENA, Calif. - Avery Dennison Corporation announced today that it has priced its offering of 8,000,000 Corporate HiMEDS Units at 7.875% with a stated amount of $50.00 per unit, for an aggregate stated amount of $400 million. The offering is expected to close on November 20, 2007, subject to customary closing conditions. Avery Dennison has also granted the underwriters an option to purchase up to 800,000 additional Corporate HiMEDS Units at 7.875%, for an aggregate additional stated amount of $40 million, solely to cover over-allotments, if any.
Avery Dennison intends to use the net proceeds to repay commercial paper obligations it incurred principally in connection with financing its acquisition of Paxar Corporation in June 2007.
Each Corporate HiMEDS Unit will initially consist of a contract to purchase Avery Dennison common stock and a 1/20 undivided beneficial ownership interest in a $1,000 principal amount senior note due November 15, 2020. Under each purchase contract, the holder is required to purchase between 0.7682 shares and 0.9756 shares of Avery Dennison common stock, in each case subject to anti-dilution adjustments, no later than on November 15, 2010. The threshold appreciation price of the purchase contracts is $65.09, which represents a premium of approximately 27.00% over the last reported sale price of Avery Dennison common stock of $51.25 on November 14, 2007. Pursuant to the Corporate HiMEDS Units, Avery Dennison will make quarterly cash payments to holders in connection with interest on the senior notes, payable at 5.350% per year, and contract adjustment payments on the purchase contracts, payable at 2.525% per year. The Corporate HiMEDS Units will carry a total distribution rate of 7.875% per year.
The joint book-running managers for this offering are J.P. Morgan Securities Inc. and Citi with Banc of America Securities LLC, Barclays Capital Inc. and Wachovia Capital Markets, LLC as co-managers.
This announcement does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The HiMEDS Units offering may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained when available from J.P. Morgan Securities Inc., at 1 Chase Manhattan Plaza, Floor 5B 10081 and from Citi, at Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220.
Avery Dennison is a global leader in pressure-sensitive labeling materials, retail tag, ticketing and branding systems, and office products. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 Company with 2006 sales of $5.6 billion. Following the acquisition of Paxar in 2007, Avery Dennison employs more than 30,000 individuals in 51 countries worldwide, who develop, manufacture and market a wide range of products for both consumer and industrial markets. Products offered by Avery Dennison include: Fasson brand self-adhesive materials; Avery Dennison and Paxar brand products for the retail and apparel industries; Avery brand office products and graphics imaging media; specialty tapes, peel-and-stick postage stamps, and labels for a wide variety of automotive, industrial and durable goods applications.