Yahoo! Inc. YHOO (“Yahoo”) today announced that it proposes to offer
$1.0 billion aggregate principal amount of its convertible senior notes due
2018 (the “notes”), subject to market conditions and other factors, in a
private placement. Yahoo also intends to grant to the initial purchasers of
the notes the right to purchase up to an additional $150.0 million aggregate
principal amount of notes, exercisable within a 30-day period, solely to cover
over-allotments. The notes will be offered and sold by the initial purchasers
only to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended.
The notes will be convertible into cash, shares of Yahoo's common stock or a
combination of cash and shares of common stock, at Yahoo's election. Interest
on the notes will be payable semi-annually in arrears on June 1 and December 1
of each year, beginning on June 1, 2014. The notes will mature on December 1,
2018, unless earlier repurchased or converted in accordance with their terms.
The interest rate, initial conversion rate and other terms of the notes will
be determined at the time of pricing of the offering. The notes will be senior
unsecured obligations of Yahoo.
Yahoo intends to use a portion of the net proceeds to pay the cost of the
convertible note hedge transactions described below (after such cost is
partially offset by the proceeds from the sale of warrants pursuant to the
warrant transactions described below). Yahoo may use up to $200.0 million of
the net proceeds from this offering to repurchase shares of its common stock
from purchasers of notes in the offering in privately negotiated transactions
effected through one of the initial purchasers or its affiliate as Yahoo's
agent. Yahoo expects the purchase price per share in such transactions to
equal the closing price per share of Yahoo's common stock on the date of
pricing of the offering.
The remaining net proceeds from the offering will be used for general
corporate purposes, including, but not limited to, acquisitions or other
strategic transactions, additional repurchases of common stock and working
capital. However, Yahoo has not designated any specific uses of the net
proceeds and has no current agreements or commitments with respect to any
material acquisition or strategic transaction. Pending any specific
application, Yahoo may invest the remaining net proceeds in short- and
long-term marketable securities. Repurchases of common stock from purchasers
of notes in the offering, as well as any additional repurchases of common
stock by Yahoo, could increase, or prevent a decline in, the market price of
Yahoo's common stock or the notes.
Yahoo today also announced that it has increased its share buyback
authorization by $5.0 billion.
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