RH Announces Pricing of $300 Million Convertible Notes Offering
June 13 2018 - 6:36PM
Business Wire
RH (NYSE: RH) today announced the pricing of $300 million of
0.00% convertible notes due 2023 at a 25% conversion premium to
today’s closing stock price of $154.92. RH also granted the initial
purchaser of the notes a 13-day option to purchase up to an
additional $50 million of the notes on the same terms and
conditions, for a total potential offering size of up to $350
million. The sale of the notes to the initial purchaser is expected
to settle on June 18, 2018, subject to customary closing
conditions.
In connection with the offering of the notes, RH has entered
into convertible note hedge and warrant transactions on terms that
have the effect of limiting earnings dilution as a result of the
convertible notes issuance up to a 100% premium to today’s closing
stock price. Under the terms of these transactions, the Company’s
shareholders are not expected to experience earnings dilution until
the Company’s stock price is above approximately $309.84. The
Company intends to use the proceeds of the offering to pay the net
cost of the convertible note hedge transactions and to pay down the
outstanding borrowings under the Company’s credit facility and
other interest bearing debt on the balance sheet.
The notes will not bear interest and will mature on June 15,
2023, unless earlier purchased by us or converted. The initial
conversion rate is 5.1640 shares of common stock per $1,000
principal amount of notes, which is equivalent to an initial
conversion price of approximately $193.65 per share representing a
premium of 25% over today’s closing stock price. The notes will be
convertible into cash, shares of RH’s common stock, or a
combination thereof, at RH’s election.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction. The notes and the shares of common stock issuable
upon conversion of the notes, if any, will not be registered under
the Securities Act of 1933, as amended (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.
About RH
RH (NYSE: RH) is a curator of design, taste and style in the
luxury lifestyle market. The Company offers collections through its
retail galleries, Source Books, and online at RH.com, RHModern.com,
and Waterworks.com
Forward-Looking
Statements
Some of the statements in this press release are
“forward-looking” and are made pursuant to the safe harbor
provision of the Private Securities Litigation Reform Act of 1995.
These “forward-looking” statements include statements relating to,
among other things, the anticipated dilution impact to holders of
the common stock due to the notes and the convertible note hedge
and warrant transactions, any implications regarding the possible
future price of the Company’s common stock and the expected use of
proceeds from these transactions. These statements involve risks
and uncertainties that may cause results to differ materially from
the statements set forth in this press release. The forward-looking
statements in this press release speak only as of the date of this
press release and are subject to uncertainty and changes. Given
these circumstances, you should not place undue reliance on these
forward-looking statements. RH expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to such
statements to reflect any change in its expectations with regard
thereto or any changes in the events, conditions or circumstances
on which any such statement is based.
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version on businesswire.com: https://www.businesswire.com/news/home/20180613006287/en/
RHCammeron McLaughlin, 415-945-4998SVP, Investor Relations &
Strategycmclaughlin@rh.com
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