Headquartered in Deerfield,
) recently announced its plan to redeem $2.67 Convertible Preferred
Stock of the holders of record as of November 15, 2012, on November
20, 2012. The $2.67 Convertible Preferred Stock was originally
issued in 1979 and approximately 97% or more of the holders have
converted their Preferred Stock into common stock.
The outstanding convertible preferred stock, as of November 15,
2012, will be redeemed at an aggregate price of $31.02 per share,
including $0.52 per share as dividend.
Beam declared that after the redemption of shares, all the
rights of the holders of preferred stock will cease to exist and no
more dividend payment will accrue on such stock. The holders can
only ask for the tender price of the redeemed shares.
Beam noticed that out of 5.5 million shares originally issued,
only 145,948 shares are outstanding and it would be logical to
eradicate these second-class shares. The company expects that this
plan will have no impact on earnings.
Beam further anticipates that the remaining holders of the $2.67
Convertible Preferred Stock will wish to convert their preferred
stock into common stock seeing the financial benefits of
conversion. As a result, the company announced that the shares can
be converted till November 15, 2012 at a conversion ratio of 8.411
shares of Beam common stock for every one share of $2.67
Convertible Preferred Stock.
The holders who convert their stock will receive Beam common
stock with a market value of $491.29, assuming the market price at
$58.41 per share on the date of conversion. The company will pay
cash to compensate for a fractional share.
Beam, the Deerfield, Illinois-based spirits giant, engages in
producing and selling branded distilled spirits products worldwide.
Globally, the company generated 2011 sales of about $2.8 billion on
volume of 34 million 9-liter cases.
Beam, which competes with
), carries a Zacks #2 Rank, implying a short-term Buy rating on the
stock. However, the company retains a long-term 'Neutral'
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