SAN FRANCISCO, June 7, 2018 /PRNewswire/ -- Twitter, Inc. (NYSE:
TWTR) today announced the pricing of $1.0
billion aggregate principal amount of 0.25% convertible
senior notes due 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
granted 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 sale of the notes to the initial
purchasers is expected to settle on June 11,
2018, subject to customary closing conditions, and is
expected to result in approximately $989.0
million in net proceeds to Twitter after deducting the
initial purchasers' discount and estimated offering expenses
payable by Twitter (assuming no exercise of the initial purchasers'
over-allotment option).
The notes will be senior, unsecured obligations of Twitter and
will bear interest at a rate of 0.25% per year. Interest will be
payable semi-annually in arrears on June
15 and December 15 of each
year, beginning on December 15, 2018.
The notes will mature on June 15,
2024, unless earlier repurchased or converted.
Twitter expects to use $70.6
million of the net proceeds of the offering of the notes to
pay the cost of the convertible note hedge transactions described
below (after such cost is partially offset by the proceeds of the
warrant transactions described below) to raise the effective
conversion price of the notes from Twitter's perspective, 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 initial conversion rate for the notes is 17.5001 shares of
common stock per $1,000 principal
amount of notes (which is equivalent to an initial conversion price
of approximately $57.14 per share).
Prior to the close of business on the business day immediately
preceding March 15, 2024, the notes
will be convertible at the option of the noteholders only upon the
satisfaction of specified conditions and during certain periods.
Thereafter until the close of business on the second scheduled
trading day preceding the relevant maturity date, the notes will be
convertible at the option of the noteholders at any time regardless
of these conditions. Conversions of the notes will be settled in
cash, shares of Twitter's common stock or a combination thereof, at
Twitter's election. The last reported sale price of Twitter's
common stock on June 6, 2018 was
$40.10 per share.
In connection with the pricing of the notes, Twitter entered
into privately negotiated convertible note hedge transactions with
one or more of the initial purchasers and/or their respective
affiliates or other financial institutions (the "hedge
counterparties"). The convertible note hedge transactions are
expected generally to reduce the potential dilution to Twitter's
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
Twitter's common stock is greater than the strike price of the
convertible note hedge transactions, which initially corresponds to
the initial conversion price of the notes. Twitter also entered
into privately negotiated warrant transactions with the hedge
counterparties. The warrant transactions will separately have a
dilutive effect to the extent the market value per share of
Twitter's common stock exceeds the strike price of any warrant
transactions, unless Twitter elects, subject to certain conditions,
to settle the warrant transactions in cash. The strike price of the
warrant transactions will initially be approximately $80.20 per share, which represents a premium of
approximately 100% over the last reported sale price of Twitter's
common stock on June 6, 2018, and is
subject to certain adjustments under the terms of the warrant
transactions. 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 Twitter's 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 option
counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding derivative
transactions with respect to Twitter's common stock and/or by
purchasing or selling shares of Twitter's common stock or other
securities of Twitter in secondary market transactions following
the pricing of the notes and prior to 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 Twitter's 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. The convertible note
hedge transactions and warrant transactions have not been, and will
not be, registered under the Act or the securities laws of any
other jurisdiction and may not be offered or sold in the United States without registration or an
applicable exemption from registration requirements.
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 engaged
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.
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. The notes and the shares
of common stock issuable upon conversion of the notes, if any, will
not be registered under the Act or any state securities laws, and
unless so registered, may not be offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Act and
applicable state laws.
Press:
Brielle Villablanca
brielle@twitter.com
Kristin Binns
kbinns@twitter.com
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SOURCE Twitter, Inc.