By Abigail W. Adams
Portland, Me., April 24 – Guess? Inc. priced an upsized $275 million of five-year convertible notes prior to the market open on Wednesday at the rich end of talk with a coupon of 2% and an initial conversion premium of 37.5%, according to a company news release.
Price talk was for a coupon of 2% to 2.5% and an initial conversion premium of 32.5% to 37.5%, according to a market source.
BofA Merrill Lynch was the bookrunner for the Rule 144A offering, which carries a downsized greenshoe of $25 million.
The initial size of the deal was $250 million with a greenshoe of $37.5 million.
The notes are non-callable and have no puts. There is dividend and takeover protection.
In connection with the pricing of the notes, the company entered into convertible note hedge and warrant transactions.
The warrants carry a strike price of $46.875 per share, representing a premium of 150% over the last reported sales price of stock.
Net proceeds are expected to be $270 million.
Proceeds will be used to cover the cost of the call spread, to repurchase shares with any remaining amount to be used for general corporate purposes.
Concurrently with the pricing of the convertible notes, Guess? purchased $26 million of its common stock for $18.76 a share.
The company intends to repurchase approximately $24 million of common stock in open market transactions and an additional $170 million through its accelerated share repurchase program.
Guess? is a Los Angeles-based designer, marketer and distributor of casual apparel and accessories.
| Issuer: | Guess? Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $275 million
|
| Greenshoe: | $25 million
|
| Maturity: | April 15, 2024
|
| Bookrunner: | BofA Merrill Lynch
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $25.78
|
| Conversion rate: | 38.79
|
| Call options: | None
|
| Put options: | None
|
| Pricing date: | April 24
|
| Settlement date: | April 26
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 2% to 2.5% and an initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | NYSE: GES
|
| Stock price: | $18.75 at market close April 23
|
| Market capitalization: | $1.53 billion
|
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