SAN FRANCISCO, June 6, 2018 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced its intention to offer, subject to
market conditions and other factors, $1.0
billion aggregate principal amount of convertible senior
notes due in 2024 (the "notes") in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the "Act"). Twitter also expects to grant the
initial purchasers of the notes a 30-day option to purchase up to
an additional $150.0 million
aggregate principal amount of the notes, to cover over-allotments,
if any.
The notes will be unsecured, senior obligations of Twitter, and
interest will be payable semi-annually in arrears. The notes will
be convertible into cash, shares of Twitter's common stock, or a
combination thereof, at Twitter's election. The interest rate,
initial conversion rate and other terms of the notes are to be
determined upon pricing of the offering.
In connection with the pricing of the notes, Twitter expects to
enter into privately negotiated convertible note hedge transactions
with one or more of the initial purchasers or their affiliates or
other financial institutions (the "hedge counterparties"). The
convertible note hedge transactions are expected generally to
reduce the potential dilution to the common stock upon any
conversion of notes and/or offset the cash payments Twitter is
required to make in excess of the principal amount of converted
notes in the event that the market price of the common stock is
greater than the strike price of those convertible note hedge
transactions. Twitter also expects to enter into privately
negotiated warrant transactions with the hedge counterparties. The
warrant transactions would separately have a dilutive effect to the
extent that the market value per share of common stock exceeds the
strike price of any warrant transactions, unless Twitter elects,
subject to certain conditions set forth in the related warrant
confirmations, to settle the warrant transactions in cash. If the
initial purchasers exercise their over-allotment option to purchase
additional notes, Twitter intends to enter into additional
convertible note hedge transactions and additional warrant
transactions with the hedge counterparties.
Twitter expects that in connection with establishing their
initial hedge of the convertible note hedge transactions and
warrant transactions, the hedge counterparties or their respective
affiliates may purchase shares of the common stock and/or enter
into various derivative transactions with respect to the common
stock concurrently with, or shortly after, the pricing of the
notes. These activities could increase (or reduce the size of any
decrease in) the market price of Twitter's common stock or the
notes at that time. In addition, Twitter expects that the hedge
counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding derivative
transactions with respect to the common stock and/or by purchasing
or selling shares of the common stock or other securities of
Twitter in secondary market transactions following the pricing of
the notes and prior to the maturity of the notes (and are likely to
do so during any observation period relating to a conversion of the
notes or in connection with any repurchase of notes by Twitter).
This activity could also cause or avoid an increase or a decrease
in the market price of the common stock or the notes, which could
affect the ability of noteholders to convert the notes and, to the
extent the activity occurs during any observation period related to
a conversion of the notes, could affect the amount and value of the
consideration that noteholders will receive upon conversion of the
notes.
As previously announced, Twitter will be added to the S&P
500 effective prior to the open of trading on June 7, 2018. Twitter has been advised by
the initial purchasers that, to facilitate clients'
requests in the ordinary course of business, they and their
affiliates expect to engage today in significant buying and selling
activity involving Twitter's common stock in connection with that
addition. This activity could also cause or avoid an increase
or a decrease in the market price of the common stock and the
notes.
Twitter expects to use a portion of the net proceeds of the
offering of the notes to pay the cost of the convertible note hedge
transactions described above (after such cost is partially offset
by the proceeds to Twitter of the warrant transactions described
above), and to use the remaining proceeds of the offering for
general corporate purposes, which may include the payment of
amounts due upon conversion, at maturity or upon
repurchase of its 0.25% Convertible Senior Notes due 2019.
The notes will be offered to qualified institutional buyers
pursuant to Rule 144A under the Act. Neither the notes nor the
shares of common stock issuable upon conversion of the notes, if
any, have been, nor will be, registered under the Act or the
securities laws of any other jurisdiction and may not be offered or
sold in the United States absent
registration or an applicable exemption from such registration
requirements.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation, or sale in any jurisdiction in which such
offer, solicitation, or sale is unlawful.
Press:
Brielle Villablanca
brielle@twitter.com
Kristin Binns
kbinns@twitter.com
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SOURCE Twitter, Inc.