Spectrum Brands Announces Pricing Terms and Accepted Tender Amounts for its Tender Offer and Consent Solicitation
Spectrum Brands Holdings (NYSE: SPB) has announced the pricing terms and accepted tender amounts for its tender offer and consent solicitation. The offer involves purchasing up to $1,160.5 million in aggregate principal of its 2026, 2029, 2030, and 2031 Senior Notes. The early tender deadline was June 3, 2024, with an expected early settlement date of June 17, 2024, for the 2026 Notes and June 18, 2024, for the other notes. Spectrum Brands will use cash on hand and possibly borrowings to fund the purchase. The final settlement date is anticipated to be June 21, 2024.
- Increased Maximum Tender Offer Amount from $925 million to $1,160.5 million.
- Accepted for purchase all notes tendered with Acceptance Priority Levels 1 through 3.
- Funding of the tender offer primarily through cash on hand, reducing reliance on new debt.
- Early settlement dates set for June 17 and 18, 2024, providing clarity to investors.
- Tendered 2031 Notes will face a proration factor of 76%, meaning not all will be accepted.
- Notes not accepted for purchase by the early tender time will not be considered if tendered after this deadline.
- Potential increase in borrowings under its revolving credit facility may impact future cash flow.
- Tender offer remains subject to various conditions and may not be consummated.
Insights
Spectrum Brands' announcement about the tender offer and consent solicitation primarily impacts the company's debt structure and liquidity position. The tender offer allows the company to retire existing debt at specific rates, effectively managing its balance sheet and potentially reducing interest expenses over time. The decision to increase the maximum tender offer amount from
Short-term implications include a decreased cash reserve due to the outflow for purchasing the notes. However, the long-term implications are more favorable as the company can potentially lower its overall debt servicing costs, improving profitability. The effect on bondholders is twofold: those who tendered will receive cash, while remaining bondholders might see a marginal increase in bond prices as supply decreases.
The decision is strategically sound, especially considering the current low interest rate environment which makes refinancing attractive. However, it involves risks such as the potential need for additional borrowing under its revolving credit facility if cash reserves are insufficient, which could introduce new interest obligations. Investors should monitor how these moves affect the company's debt ratios and liquidity metrics in future quarters.
The tender offer signals Spectrum Brands' confidence in its future cash flows and operational stability, influenced by recent asset sales and liquidations of short-term investments. This move could positively impact investor sentiment, suggesting the company is in a strong position to optimize its capital structure.
However, the market's reaction will depend on the perceived success of this strategy. If the tender offer is seen as a method to streamline operations and reduce financial strain, stock prices could reflect increased investor confidence. Conversely, if investors are concerned about the reduced cash reserves and potential increased reliance on the credit facility, it could introduce volatility in the stock price.
Furthermore, the company's broad portfolio of trusted brands in the home essentials market provides a stable revenue base, which helps in justifying such financial maneuvers. Investors should consider the competitive position of these brands and the overall market demand for home essentials in evaluating the long-term impact of these financial decisions.
As of the previously announced early tender time of 5:00 p.m.,
Title of Security |
Security Identifiers(1) |
Principal Amount of Notes Outstanding |
Acceptance Priority Level |
Aggregate Principal Amount Tendered |
Aggregate Principal Amount Accepted for Purchase |
Reference Treasury Security |
Reference Yield |
Fixed Spread (bps) |
Total Consideration(2) |
Proration Factor |
Aggregate Purchase Price(3) |
|
ISIN No. XS1493295874 / XS1493296500 Common Code 149329587 / 149329650 |
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1 |
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N/A |
N/A |
N/A |
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|
|
|
CUSIP No. 84762L AV7 / U84569 AK5,
|
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2 |
|
|
N/A |
N/A |
N/A |
|
|
|
|
CUSIP No. 84762L AW5 / U84569 AL3,
|
|
3 |
|
|
N/A |
N/A |
N/A |
|
|
|
|
CUSIP No. 84762L AX3 / U84569 AM1
|
|
4 |
|
|
|
|
+0 |
|
|
|
______________________ | |
(1) |
No representation is made as to the correctness or accuracy of the security identifiers listed in this table or printed on the Notes. They are provided solely for the convenience of Holders of the Notes. |
(2) |
Per |
(3) |
Includes accrued and unpaid interest to, but excluding, the applicable Early Tender Settlement Date. |
(4) |
In calculating the combined aggregate purchase price of Notes validly tendered under the Tender Offer to determine whether the Maximum Tender Offer Amount has been reached, the principal amount of the 2026 Notes validly tendered was multiplied by the applicable Total Consideration (divided by 1,000), and converted into |
(5) |
The Bloomberg Reference Page is FIT6. |
(6) |
The Total Consideration for the 2031 Notes has been calculated by reference to the “Fixed Spread” specified in this table over the yield to maturity (the “Reference Yield”) based on the bid-side price of the “Reference Treasury Security” specified in this table, in accordance with standard market practice at 11:00 a.m., |
Because the aggregate principal amount of Notes validly tendered and not validly withdrawn at or prior to the Early Tender Time has an aggregate purchase price exceeding the Maximum Tender Offer Amount, Spectrum Brands expects to accept for purchase all Notes validly tendered and not validly withdrawn at or prior to the Early Tender Time with Acceptance Priority Levels 1 through 3, and Notes validly tendered and not validly withdrawn at or prior to the Early Tender Time with Acceptance Priority Level 4 using a proration factor of approximately
General Information
Spectrum Brands’ obligations to complete the Tender Offer and Consent Solicitation are subject to and conditioned upon the satisfaction or waiver by Spectrum Brands of certain conditions, including the General Conditions, the Supplemental Indenture Conditions and the Total Consideration Condition (each as described in the Notes Statement), as applicable to a Series of Notes. There can be no assurance that either of the Tender Offer or Consent Solicitation will be consummated. Spectrum Brands may amend, extend or terminate the Tender Offer and Consent Solicitation, in its sole discretion. Spectrum Brands has the discretion to further upsize the Tender Offer and Consent Solicitation. Withdrawal rights for the Notes expired at 5:00 p.m.,
Spectrum Brands intends to fund the Total Consideration (inclusive of the Early Tender Payment) and the Tender Offer Consideration (including, in each case, accrued and unpaid interest paid), plus all related fees and expenses, using cash on hand, including proceeds from asset sales, proceeds from the liquidation of short-term investments, and, if necessary, borrowings under its revolving facility under its Second Amended and Restated Credit Agreement, dated October 19, 2023, as amended through the date hereof. Notes that are tendered and accepted in the Tender Offer will cease to be outstanding and will be cancelled.
The Tender Offer and Consent Solicitation remain scheduled to expire at 5:00 p.m.,
The terms and conditions of the Tender Offer are described in the Notes Statement.
Spectrum Brands and its affiliates reserve the right, in their sole discretion, to redeem any of the Notes that remain outstanding after the completion of the Tender Offer in accordance with the terms of the respective indentures governing the Notes, to repurchase any such Notes in open market purchases, privately negotiated transactions or otherwise, upon such terms and at such prices as they may determine, which in each case may be more or less than the price to be paid pursuant to the Tender Offer, to defease the covenants of the Notes, including the covenant on the “Limitation on Asset Sales,” or to satisfy and discharge Spectrum Brands’ obligations pursuant to the indentures governing such Notes. Spectrum Brands expects to redeem any 2026 Notes that remain outstanding following the applicable Early Tender Settlement Date on June 20, 2024. This press release does not constitute a notice of redemption.
In certain circumstances, the “Limitation on Asset Sales” covenant in the indenture governing the 2031 Notes may require Spectrum Brands to make offers to purchase the 2031 Notes (“Asset Sale Offers”) using the “net proceeds” of the previously announced sale of its Hardware and Home Improvement business to ASSA ABLOY, completed on June 20, 2023 (as defined in the indenture governing the 2031 Notes, the “Net Proceeds”), if such amount of Net Proceeds available for Asset Sale Offers exceeds
Spectrum Brands has retained RBC Capital Markets, LLC, J.P. Morgan Securities LLC (with respect to the 2029 Notes, the 2030 Notes and the 2031 Notes, collectively, the “USD Notes”), J.P. Morgan Securities plc (with respect to the Euro Notes) and UBS Securities LLC to serve as the Dealer Managers for the Tender Offer and Solicitation Agents for the Consent Solicitation. Requests for documents may be directed to D.F. King, the Information and Tender Agent at (800) 549-6864 (toll-free) or +44 (0) 20 7920 9700 (for the Euro Notes). Questions regarding the Tender Offer may be directed to RBC Capital Markets, LLC at (877) 381-2099 (toll-free) or (212) 618-7843 (collect) (for the USD Notes) and at +44 20 7029 7529 (for the Euro Notes), to J.P. Morgan Securities LLC at (866) 834-4666 (toll-free) or (212) 834-7489 (collect) (for the USD Notes), J.P. Morgan Securities plc (for the Euro Notes) at +44 20 7134 4353, or UBS Securities LLC at (833) 690-0971 (toll-free) or (212) 882-5723 (collect).
This press release is for informational purposes only. The Tender Offer and Consent Solicitation are being made solely by the Notes Statement. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful. Any offers of concurrently offered securities will be made only by means of a private offering memorandum. The Tender Offer and Consent Solicitation are not being made to Holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Tender Offer or Consent Solicitation to be made by a licensed broker or dealer, the Tender Offer and Consent Solicitation will be deemed to be made on behalf of Spectrum Brands by the Dealer Managers and Solicitation Agents, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
None of Spectrum Brands, the Information and Tender Agent, the Dealer Managers and Solicitation Agents or any of their respective affiliates makes any recommendation as to whether Holders should tender or refrain from tendering their Notes, and no person or entity has been authorized by any of them to make such a recommendation. Holders must make their own decision as to whether to tender Notes and, if so, the principal amount of the Notes to tender.
About Spectrum Brands Holdings, Inc.
Spectrum Brands Holdings is a home-essentials company with a mission to make living better at home. We focus on delivering innovative products and solutions to consumers for use in and around the home through our trusted brands. We are a leading supplier of specialty pet supplies, lawn and garden and home pest control products, personal insect repellents, shaving and grooming products, personal care products, and small household appliances. Helping to meet the needs of consumers worldwide, Spectrum Brands offers a broad portfolio of market-leading, well-known and widely trusted brands including Tetra®, DreamBone®, SmartBones®, Nature’s Miracle®, 8-in-1®, FURminator®, Healthy-Hide®, Good Boy®, Meowee!®, OmegaOne®, Spectracide®, Cutter®, Repel®, Hot Shot®, Rejuvenate®, Black Flag®, Liquid Fence®, Remington®, George Foreman®, Russell Hobbs®, BLACK + DECKER®, PowerXL®, Emeril Lagasse®, and Copper Chef®. For more information, please visit www.spectrumbrands.com. Spectrum Brands – A Home Essentials Company™.
Forward-looking Statements
We have made or implied certain forward-looking statements in this document and may make additional oral forward-looking statements from time to time. All statements, other than statements of historical facts included or incorporated by reference in this document, including, without limitation, statements or expectations regarding our business strategy, future operations, financial condition, estimated revenues, projected costs, inventory management, earnings power, projected synergies, prospects, plans and objectives of management, outcome of any litigation and information concerning expected actions of third parties are forward-looking statements. When used in this document, the words future, anticipate, pro forma, seek, intend, plan, envision, estimate, believe, belief, expect, project, forecast, outlook, earnings framework, goal, target, could, would, will, can, should, may and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Since these forward-looking statements are based upon our current expectations of future events and projections and are subject to a number of risks and uncertainties, many of which are beyond our control and some of which may change rapidly, actual results or outcomes may differ materially from those expressed or implied herein, and you should not place undue reliance on these statements. Important factors that could cause our actual results to differ materially from those expressed or implied herein include, without limitation: (1) the economic, social and political conditions or civil unrest, terrorist attacks, acts of war, natural disasters, other public health concerns or unrest in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240604255970/en/
Investor/Media Contact: Joanne Chomiak
608-275-4458
Source: Spectrum Brands Holdings, Inc.
FAQ
What is the total value of the tender offer for Spectrum Brands (SPB)?
When is the early tender settlement date for Spectrum Brands (SPB) 2026 notes?
What percentage of the 2031 notes will be accepted by Spectrum Brands (SPB)?
How will Spectrum Brands (SPB) fund the tender offer?
What happens to notes tendered after the early tender deadline for Spectrum Brands (SPB)?