WisdomTree Announces Repurchase of:
- Series A Preferred Stock (equivalent to 14.75 Million Shares of
Common Stock) from ETFS Capital Limited
- Approximately $104 Million of 5.75% Convertible Senior Notes
due August 2028
- Approximately 5.7 Million Shares of Common Stock
WisdomTree, Inc. (NYSE: WT) (“WisdomTree”), a global financial
innovator, today announced the pricing of its offering of $300
million aggregate principal amount of convertible senior notes due
2029 (the “notes”) in a private offering (the “offering”) to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”).
WisdomTree also granted the initial purchaser of the notes an
option to purchase up to an additional $45 million aggregate
principal amount of the notes, which the initial purchaser
exercised in full. The sale of the full $345 million aggregate
principal amount of notes to the initial purchaser is expected to
settle on August 13, 2024, subject to customary closing conditions,
and is expected to result in approximately $337 million in net
proceeds to WisdomTree after deducting the initial purchaser’s
discount and estimated offering expenses payable by WisdomTree.
WisdomTree intends to use approximately $133 million of the net
proceeds from the offering to repurchase approximately $104 million
in aggregate principal amount of its 5.75% convertible senior notes
due 2028 (the “2028 notes”) as described below. WisdomTree also
intends to use approximately $55 million of the net proceeds from
the offering to repurchase shares of WisdomTree’s common stock from
certain purchasers of the notes as described below, and a portion
of the net proceeds from the offering to finance WisdomTree’s
repurchase of all 14,750 shares of WisdomTree’s issued and
outstanding Series A Non-Voting Convertible Preferred Stock
(equivalent to 14.75 million shares of WisdomTree’s common stock)
from ETFS Capital Limited for an aggregate purchase price of
approximately $144 million (the “Series A preferred stock
repurchase”). The consummation of the Series A preferred stock
repurchase is contingent upon the closing of the offering of the
notes and the 2028 notes repurchases. On a pro forma basis for the
offering of the notes, inclusive of the initial purchaser’s
exercise of the option to purchase additional notes and the use of
proceeds therefrom, the Series A preferred stock repurchase is
approximately 9% accretive to WisdomTree’s earnings. WisdomTree
intends to use the remainder of the net proceeds from the offering,
if any, for working capital and other general corporate
purposes.
Key terms of the notes are as follows:
- Maturity in 5 years – August 15, 2029, unless earlier
converted, repurchased or redeemed.
- Interest rate of 3.25% – The notes will bear interest at a rate
of 3.25% per year, payable semiannually in arrears on February 15
and August 15 of each year, beginning on February 15, 2025.
- Conversion price of $11.82 – The notes will be convertible at
an initial conversion rate of 84.5934 shares of WisdomTree’s common
stock, per $1,000 principal amount of notes (equivalent to an
initial conversion price of approximately $11.82 per share, which
represents a conversion premium of approximately 22.5% to the last
reported sale price of $9.65 per share of WisdomTree’s common stock
on The New York Stock Exchange on August 8, 2024).
- Conversion – Prior to May 15, 2029, the notes will be
convertible at the option of the holders of the notes only upon the
satisfaction of certain conditions and during certain periods, and
thereafter, at any time until the close of business on the second
scheduled trading day immediately preceding the maturity date.
- Cash settlement of principal amount – Upon conversion,
WisdomTree will pay cash up to the aggregate principal amount of
the notes to be converted. At its election, WisdomTree will also
settle its conversion obligation in excess of the aggregate
principal amount of the notes being converted in either cash,
shares of its common stock or a combination of cash and shares of
its common stock.
- Redemption price of $15.37 – WisdomTree may redeem for cash all
or any portion of the notes, at its option, on or after August 20,
2026 and on or prior to the 55th scheduled trading day immediately
preceding the maturity date, if the last reported sale price of
WisdomTree’s common stock has been at least 130% of the conversion
price then in effect for at least 20 trading days (whether or not
consecutive), including the trading day immediately preceding the
date on which WisdomTree provides notice of redemption, during any
30 consecutive trading day period ending on, and including, the
trading day immediately preceding the date on which WisdomTree
provides notice of redemption, at a redemption price equal to 100%
of the principal amount of the notes to be redeemed, plus accrued
and unpaid interest to, but excluding the redemption date.
- Limited investor put rights – Holders of the notes will have
the right to require WisdomTree to repurchase for cash all or a
portion of their notes at 100% of their principal amount, plus any
accrued and unpaid interest, upon the occurrence of certain change
of control transactions or liquidation, dissolution or common stock
delisting events (collectively “fundamental changes”).
- Conversion rate increase in certain customary circumstances –
WisdomTree will also be required to increase the conversion rate
for holders who convert their notes in connection with fundamental
changes and certain other corporate events or convert their notes
called for redemption (or deemed called for redemption) following
delivery by WisdomTree of a notice of redemption, in either case,
in certain circumstances.
When issued, the notes will be WisdomTree’s senior unsecured
obligations, and will rank equal in right of payment to the
Company’s 3.25% convertible senior notes due 2026 and the 2028
notes.
Contemporaneously with the pricing of the notes in the offering,
WisdomTree entered into separate privately negotiated transactions
with certain holders of the 2028 notes to repurchase approximately
$104 million in aggregate principal amount of the 2028 notes for
approximately $133 million in cash (each a “note repurchase” and
collectively the “2028 notes repurchases”). WisdomTree anticipates
recognizing a one-time loss on extinguishment of approximately $30
million in connection with these transactions.
WisdomTree expects that certain holders of 2028 notes that sell
their 2028 notes in negotiated transactions with WisdomTree may
enter into or unwind various derivatives with respect to
WisdomTree’s common stock and/or purchase shares of its common
stock in the market. The amount of WisdomTree’s common stock that
such holders purchase may be substantial in relation to the
historic average daily trading volume of the common stock. In
addition, WisdomTree expects that certain purchasers of the notes
offered in the offering may establish a short position with respect
to WisdomTree’s common stock by short selling the common stock or
by entering into short derivative positions with respect to the
common stock, in each case, in connection with the offering. The
net effect of the above market activities by holders of 2028 notes
and purchasers of the notes offered in the offering could increase
(or reduce the size of any decrease in) or decrease (or reduce the
size of any increase in) the market price of WisdomTree’s common
stock and/or the market price of the notes offered in the offering,
and WisdomTree cannot predict the magnitude of such market
activities or the overall effect they will have on the market price
of the notes offered hereby and/or the market price of WisdomTree’s
common stock.
WisdomTree intends to use approximately $55 million of the net
proceeds from the offering to repurchase shares of its common stock
from certain purchasers of the notes in privately negotiated
transactions effected through the initial purchaser of the notes,
as its agent, concurrently with the pricing of the offering. The
price per share of WisdomTree’s common stock repurchased in such
transactions is equal to the last reported price per share of its
common stock on August 8, 2024, which was $9.65 per share. These
repurchases could increase (or reduce the size of any decrease in)
the market price of WisdomTree’s common stock and/or the market
price of the notes offered in the offering.
The notes were only offered to qualified institutional buyers
pursuant to Rule 144A under the Securities Act. The notes and the
common stock issuable upon conversion of the notes, if any, have
not been and will not be registered under the Securities Act, or
any state securities laws, and unless so registered, may not be
offered or sold in the United States except pursuant to 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.
About WisdomTree
WisdomTree is a global financial innovator, offering a
well-diversified suite of exchange-traded products (ETPs), models,
solutions and products leveraging blockchain technology. We empower
investors and consumers to shape their future and support financial
professionals to better serve their clients and grow their
businesses. WisdomTree is leveraging the latest financial
infrastructure to create products that provide access, transparency
and an enhanced user experience. Building on our heritage of
innovation, we are also developing and have launched
next-generation digital products, services and structures,
including digital or blockchain-enabled mutual funds and tokenized
assets, as well as our blockchain-native digital wallet, WisdomTree
Prime®.*
* The WisdomTree Prime digital wallet and digital asset services
are made available through WisdomTree Digital Movement, Inc., a
federally registered money services business, state-licensed money
transmitter and financial technology company (NMLS ID: 2372500) or
WisdomTree Digital Trust Company, LLC, in select U.S. jurisdictions
and may be limited where prohibited by law. WisdomTree Digital
Trust Company, LLC is chartered as a limited purpose trust company
by the New York State Department of Financial Services to engage in
virtual currency business.
WisdomTree currently has approximately $106.0 billion in assets
under management globally.
WisdomTree® is the marketing name for WisdomTree, Inc. and its
subsidiaries worldwide.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
based on WisdomTree’s management’s beliefs and assumptions and on
information currently available to management. Although WisdomTree
believes that the expectations reflected in these forward-looking
statements are reasonable, these statements relate to future events
or WisdomTree’s future financial performance, and involve known and
unknown risks, uncertainties and other factors that may cause
actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continue” or the negative of
these terms or other comparable terminology. These statements are
only predictions. You should not place undue reliance on
forward-looking statements because they involve known and unknown
risks, uncertainties and other factors, which are, in some cases,
beyond WisdomTree’s control and which could materially affect
results. Factors that may cause actual results to differ materially
from current expectations include, among other things, the risks
described below. If one or more of these or other risks or
uncertainties occur, or if WisdomTree’s underlying assumptions
prove to be incorrect, actual events or results may vary
significantly from those implied or projected by the
forward-looking statements. No forward-looking statement is a
guarantee of future performance. You should read this press release
completely and with the understanding that WisdomTree’s actual
future results may be materially different from any future results
expressed or implied by these forward-looking statements.
In particular, forward-looking statements in this press release
may include statements about the timing and closing of the offering
of the notes, the expected use of the proceeds from the sale of the
notes, the closing of the Series A preferred stock repurchase and
the potential effects of the 2028 notes repurchases and the share
repurchases on WisdomTree’s common stock and the market price for
the notes, and other statements contained in this press release
that are not historical facts. Forward-looking statements are
subject to many risks and uncertainties, including without
limitation, risks related to or associated with whether WisdomTree
will consummate the offering of the notes on the expected terms, or
at all, which could differ or change based upon market conditions
or other reasons, and the other risks set forth under the caption
“Risk Factors” in WisdomTree’s Annual Report on Form 10-K for the
year ended December 31, 2023 and Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2024 and June 30, 2024.
Category: Business Update
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240809600121/en/
Investor Relations Jeremy Campbell +1.917.267.3859
jeremy.campbell@wisdomtree.com
Corporate Communications Jessica Zaloom +1.917.267.3735
jzaloom@wisdomtree.com
WisdomTree (NYSE:WT)
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