SAN FRANCISCO, March 2, 2021 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced the pricing of $1.25 billion aggregate principal amount of 0%
convertible senior notes due 2026 (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 13-day option to
purchase up to an additional $187.5
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 March 4,
2021, subject to customary closing conditions, and is
expected to result in approximately $1,235.4
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. The
notes will not bear interest, and the principal amount of the notes
will not accrete. The notes will mature on March 15, 2026, unless earlier repurchased or
converted.
Twitter expects to use approximately $45.5 million of the net proceeds from this
offering to pay the cost of the convertible note hedge transactions
described below (after such cost is partially offset by the
proceeds to Twitter from the warrant transactions described below),
and the remaining proceeds to pay any amounts due upon conversion
or at maturity of its 1.00% Convertible Senior Notes due 2021 and
for general corporate purposes, including capital expenditures,
working capital and potential acquisitions.
The initial conversion rate for the notes is 7.6905 shares of
common stock per $1,000 principal
amount of notes (which is equivalent to an initial conversion price
of approximately $130.03 per share).
Prior to the close of business on the business day immediately
preceding December 15, 2025, 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 March 1,
2021 was $77.63 per share.
In connection with the pricing of the notes, Twitter entered
into privately negotiated convertible note hedge transactions with
certain of the initial purchasers and/or their respective
affiliates and another financial institution (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 $163.02 per share, which represents a premium of
approximately 110.0% over the last reported sale price of Twitter's
common stock on March 1, 2021, 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.
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:
Investors:
ir@twitter.com
Press:
press@twitter.com
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SOURCE Twitter, Inc.