Guess Closes $300 Mln Convertible Note Offering; To Slash Quarterly Dividend
(RTTNews) - Apparel retailer Guess? Inc. (GES) said Monday that it has completed issuance of its previously announced upsized private placement of $300 million of 2.00 percent convertible senior notes due 2024, which amount includes the exercise by the initial purchaser of the entire $25 million greenshoe option.
Guess also said it expects to reduce its quarterly cash dividend from $0.225 to $0.1125 per share in order to redeploy capital and return incremental value to stockholders through share repurchases.
Guess intends to use substantially all of the net proceeds from the offering of the notes, after effecting convertible note hedge transactions, to effect share repurchases.
This includes repurchasing $170 million of shares pursuant to an accelerated share repurchase program, entered into by the company on April 26, 2019. The company will complete the repurchase of approximately $26 million of shares, about 1.4 million shares, in privately negotiated share repurchases.
The company will also continue and complete its previously announced open-market repurchases of $24 million or more of shares.
Guess also said it has entered into convertible note hedge and warrant transactions with a warrant strike price of $46.875 per share, representing a 150 percent premium to the company's stock price at the time of pricing of the notes, which are generally intended to limit potential dilution from the offering.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.