The Cheesecake Factory Incorporated Prices Offerings of Convertible Senior Notes and Common Stock
The Cheesecake Factory announced concurrent public offerings of $300 million of 0.375% convertible senior notes due 2026 and 3.125 million shares of common stock at $56.00 per share. The net proceeds from the offerings are estimated at approximately $457.4 million, aimed at repurchasing preferred stock and repaying debt. The notes will accrue interest at 0.375% per annum and are redeemable after June 20, 2024. The company also initiated a preferred stock repurchase of 150,000 shares for approximately $447 million, scheduled to close on June 15, 2021.
- Net proceeds of approximately $291 million from the note offering and $166.9 million from the common stock offering will strengthen the balance sheet.
- The repurchase of preferred stock simplifies the capital structure and reduces future dividend obligations.
- Issuing convertible notes and common stock may dilute existing shareholders' equity.
- Dependence on market conditions for the successful completion of offerings and repurchase.
The Cheesecake Factory Incorporated (NASDAQ: CAKE) (the “Company”) today announced the pricing of its concurrent public offerings of
The Company estimates that the net proceeds from the note offering will be approximately
The Company has entered into agreements with the holders of its outstanding Series A convertible preferred stock pursuant to which the Company will repurchase 150,000 shares of the outstanding Series A convertible preferred stock for approximately
The notes will be senior, unsecured obligations of the Company and will accrue interest at a rate of
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or after June 20, 2024 and on or before the 30th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds
If a “fundamental change” (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require the Company to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
J.P. Morgan, BNP PARIBAS, BofA Securities and Wells Fargo Securities are acting as joint book-running managers for the offerings.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities referred to in this press release, nor will there be any sale of any such securities, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
We have filed a registration statement (including a prospectus) and preliminary prospectus supplements with the SEC for the offerings to which this communication relates. Before you invest, you should read the applicable preliminary prospectus supplement and the prospectus in that registration statement and other documents we have filed with the SEC for more complete information about us and these offerings. You may get these documents free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any underwriter or any dealer participating in the applicable offering will arrange to send you the applicable preliminary prospectus supplement (or, when available, the applicable final prospectus supplement) and the accompanying prospectus upon request to: J.P. Morgan Securities LLC, Attention: c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at (866) 803-9204.
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated is a leader in experiential dining. We are culinary forward and relentlessly focused on hospitality. Delicious, memorable experiences created by passionate people—this defines who we are and where we are going. We currently own and operate 300 restaurants throughout the United States and Canada under brands including The Cheesecake Factory®, North Italia® and a collection within our Fox Restaurant Concepts business. Internationally, 28 The Cheesecake Factory® restaurants operate under licensing agreements. Our bakery division operates two facilities that produce quality cheesecakes and other baked products for our restaurants, international licensees and third-party bakery customers.
Forward-Looking Statements
This press release includes forward-looking statements, including statements regarding the completion of the offerings, the preferred stock repurchase and conversion and the expected amount and intended use of the net proceeds from the offerings. Forward-looking statements represent the Company’s current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, the satisfaction of the closing conditions related to the preferred stock repurchase and conversion and the offerings and risks relating to the Company’s business, including those described in periodic reports that the Company files from time to time with the SEC. The Company may not consummate the preferred stock repurchase and conversion or the offerings described in this press release and, if the offerings are consummated, cannot provide any assurances regarding its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and the Company does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.
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FAQ
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