Stanley Black & Decker, Inc. (NYSE: SWK) (the “Company”) today announced commencement of a remarketing of $750 million of its Series D Cumulative Perpetual Convertible Preferred Stock, with no par value and the liquidation preference fixed at $1,000 per share (the “Convertible Preferred Stock”), originally issued on November 13, 2019 as part of the Company’s corporate units (the “Corporate Units”).
Currently, the Convertible Preferred Stock (i) bears no dividends; (ii) is convertible only upon the occurrence of certain fundamental change events, and, subject to adjustment, the initial conversion rate is 5.2263 shares of the Company’s common stock per share, which is equivalent to a conversion price of approximately $191.34 per share of the Company’s common stock; and (iii) is redeemable from and after December 22, 2022, at a redemption price equal to 100% of the liquidation preference thereof, plus any accumulated and unpaid dividends.
In connection with a successful remarketing, the Company intends to increase the current dividend rate above 0%. In addition, if the remarketing is successful, the Company intends to keep December 22, 2022 as the earliest redemption date applicable to the Convertible Preferred Stock. Holders of shares of the Convertible Preferred Stock will have a right to convert their shares at their option, at any time and from time to time, into, at the Company’s election, cash, shares of the Company’s common stock or a combination thereof, unless the Company has previously irrevocably elected a settlement payment method to apply. Any dividends on the Convertible Preferred Stock will be paid, when, as and if declared by the Company’s board of directors, solely in cash. While the Company currently anticipates these terms to be in effect after the remarketing, the actual terms of the remarketed Convertible Preferred Stock are subject to the remarketing and will be subsequently determined by the Company. The Company intends to redeem for cash all outstanding shares of the Convertible Preferred Stock on December 22, 2022, subject to the closing of the remarketing, approval by the board of directors and customary legal requirements.
The remarketing will be successful if the Convertible Preferred Stock is remarketed at a price equal to or greater than $750 million, or $1,000 per share. If the remarketing is successful, the proceeds of the remarketing of the Convertible Preferred Stock will provide to the holders of the Corporate Units the consideration necessary to satisfy their obligations under the related purchase contracts. The purchase contracts obligate the holders of Corporate Units to purchase shares of the Company’s common stock on November 15, 2022 for $750 million in the aggregate, and the Convertible Preferred Stock is pledged to secure the purchase contract obligations of such holders. Any remaining proceeds will be paid to the holders of such Corporate Units.
This filing does not constitute an offer to sell, or a solicitation of an offer to buy the securities described herein. The remarketing has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and is being conducted pursuant to an exemption from such registration requirements. Any shares of Convertible Preferred Stock subject to the remarketing may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements.
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