Spectrum Brands Holdings, Inc. (NYSE: SPB), a leading global
branded consumer products and home essentials company focused on
driving innovation and providing exceptional customer service,
announced today that its wholly-owned subsidiary, Spectrum Brands,
Inc. (“Spectrum Brands”), has commenced (i) a cash tender offer
(the “Tender Offer”) of up to an aggregate principal amount of its
outstanding 4.00% Senior Notes due 2026 (the “2026 Notes” or the
“Euro Notes”), 5.00% Senior Notes due 2029 (the “2029 Notes”),
5.50% Senior Notes due 2030 (the “2030 Notes”) and 3.875% Senior
Notes due 2031 (the “2031 Notes” and, together with the 2026 Notes,
the 2029 Notes and the 2030 Notes, the “Notes,” and each, a
“Series”) that may be purchased for a combined aggregate purchase
price of up to $925.0 million (including accrued and unpaid
interest, which also will be paid to, but excluding, the Early
Tender Settlement Date or the Final Settlement Date (each as
defined below), as the case may be, but excluding fees and expenses
relating to the Tender Offer). Spectrum Brands has the discretion
to upsize the Tender Offer.
Concurrently with the Tender Offer, Spectrum Brands is
soliciting consents (the “Consent Solicitation”) (i) from Holders
of the 2026 Notes to certain proposed amendments to the indenture
governing the 2026 Notes, dated as of September 20, 2016, as
supplemented (the “2026 Notes Indenture”), (ii) from Holders of the
2029 Notes to certain proposed amendments to the indenture
governing the 2029 Notes, dated as of September 24, 2019, as
supplemented (the “2029 Notes Indenture”), and (iii) from Holders
of the 2030 Notes to certain proposed amendments to the indenture
governing the 2030 Notes, dated as of June 30, 2020, as
supplemented (the “2030 Notes Indenture”) (such proposed amendments
are collectively referred to as the “Proposed Amendments” and such
consents being solicited are each a “Consent” and collectively, the
“Consents”). Spectrum Brands is not soliciting any Consents from
Holders of the 2031 Notes. The Proposed Amendments, if consummated,
would amend each of the 2026 Notes Indenture, the 2029 Notes
Indenture and the 2030 Notes Indenture, as applicable, to shorten
the notice periods for the redemption of such Notes and eliminate
substantially all of the restrictive covenants and certain events
of default.
Upon the terms and subject to the conditions set forth in the
Offer to Purchase and Consent Solicitation Statement relating to
the Notes (as it may be amended or supplemented from time to time,
the “Notes Statement”), Spectrum Brands will pay to each Holder who
validly tenders (and does not validly withdraw) their Notes and, if
applicable, thereby validly delivers (and does not validly revoke)
Consents prior to 5:00 p.m., New York City time, on June 3, 2024
(the “Early Tender Time”), an amount in cash equal to the “Total
Consideration” (inclusive of the “Early Tender Payment”) specified
in the table below. Tendered Notes may be withdrawn any time prior
to 5:00 p.m., New York City time, on June 3, 2024. Holders who
validly tender (and do not validly withdraw) their Notes prior to
the Early Tender Time will also be entitled to receive the Total
Consideration (inclusive of the Early Tender Payment) specified in
the table below on the Early Tender Settlement Date (as defined
below) if such Notes are accepted for purchase. The “Early Tender
Settlement Date” for the Tender Offer will follow the Early Tender
Time and is expected to be June 18, 2024. Holders who validly
tender (and do not validly withdraw) their Notes after the Early
Tender Time but prior to the Expiration Time (as defined below)
will be entitled to receive the “Tender Offer Consideration”
specified in the table below on the Final Settlement Date (as
defined below) if such Notes are accepted for purchase. The Tender
Offer Consideration is the Total Consideration minus the Early
Tender Payment. Holders will also be paid accrued and unpaid
interest, if any, on their Notes from the last interest payment
date up to, but not including, the Early Tender Settlement Date or
the Final Settlement Date (as the case may be) for all of their
Notes that Spectrum Brands accepts for purchase in the Tender
Offer. The Total Consideration (inclusive of the Early Tender
Payment) and the Tender Offer Consideration for each $1,000
principal amount of the 2031 Notes validly tendered and accepted
for purchase will be determined in the manner described in the
Notes Statement by reference to the Fixed Spread specified in the
table below over the yield to maturity based on the bid-side price
of the Reference Treasury Security specified in the table below, in
accordance with standard market practice at 11:00 a.m., New York
City time, on the business day following the Early Tender Time,
expected to be June 4, 2024.
The Tender Offer and Consent Solicitation are scheduled to
expire at 5:00 p.m., New York City time, on June 18, 2024, unless
extended, earlier terminated or (in the case of the Consent
Solicitation) earlier expired by Spectrum Brands in its sole
discretion (the “Expiration Time”). The “Final Settlement Date” for
the Tender Offer will promptly follow the Expiration Time and is
expected to be June 21, 2024. Other information relating to the
Tender Offer is listed in the table below.
Title of Security
Security
Identifiers(1)
Principal Amount of Notes
Outstanding
Acceptance Priority
Level
Reference Treasury
Security
Bloomberg Reference
Page
Fixed Spread (bps)
Tender Offer
Consideration(2)
Early Tender
Payment(3)
Total Consideration(4)
4.00% Senior Notes due 2026
ISIN No. XS1493295874 /
XS1493296500
Common Code
149329587/
149329650
€425,000,000
1
N/A
N/A
N/A
€950.00
€50.00
€1,000.00
5.00% Senior Notes due 2029
CUSIP No. 84762L AV7 / U84569
AK5, ISIN No. US84762LAV71 / USU84569AK55
$289,089,000
2
N/A
N/A
N/A
$950.00
$50.00
$1,000.00
5.50% Senior Notes due 2030
CUSIP No. 84762L AW5 / U84569
AL3, ISIN No. US84762LAW54 / USU84569AL39
$155,719,000
3
N/A
N/A
N/A
$950.00
$50.00
$1,000.00
3.875% Senior Notes due 2031
CUSIP No. 84762L AX3 / U84569 AM1
ISIN No. US84762LAX38 / USU84569AM12
$413,715,000
4
4.25% U.S. Treasury due February
28, 2031
FIT6
+0
N/A
$50.00
N/A
____________________
(1)
No representation is made as to
the correctness or accuracy of the security identifiers listed in
this table or printed on the Notes. They are provided solely for
the convenience of Holders of the Notes.
(2)
Per $1,000 or €1,000 principal
amount of Notes (as applicable) validly tendered and accepted for
purchase for each Series, and not validly withdrawn at or prior to
the Expiration Time. Excludes accrued and unpaid interest, which
also will be paid to, but excluding, the Final Settlement Date.
(3)
Per $1,000 or €1,000 principal
amount of Notes (as applicable) validly tendered and accepted for
purchase for each Series, and not validly withdrawn at or prior to
the Early Tender Time.
(4)
Per $1,000 or €1,000 principal
amount of Notes (as applicable) validly tendered and accepted for
purchase for each Series, and not validly withdrawn at or prior to
the Early Tender Time. Includes the Early Tender Payment, but
excludes accrued and unpaid interest, which also will be paid to,
but excluding, the Early Tender Settlement Date.
General Information
Spectrum Brands’ obligations to complete the Tender Offer and
Consent Solicitation are subject to and conditioned upon the
satisfaction or waiver by Spectrum Brands of certain conditions,
including the General Conditions, the Supplemental Indenture
Conditions and the Total Consideration Condition (each as described
in the Notes Statement), as applicable to a Series of Notes. There
can be no assurance that either of the Tender Offer or Consent
Solicitation will be consummated. Spectrum Brands may amend, extend
or terminate the Tender Offer and Consent Solicitation, in its sole
discretion.
Subject to the Maximum Tender Offer Amount, the Notes accepted
for purchase on the Early Tender Settlement Date or the Final
Settlement Date, as applicable, will be accepted in accordance with
their respective Acceptance Priority Levels (in numerical order
with “1” being the highest Acceptance Priority Level) as set forth
in the table above. Subject to the Maximum Tender Offer Amount, all
Notes validly tendered and not validly withdrawn at or prior to the
Early Tender Time will be accepted for purchase in priority to
Notes validly tendered after the Early Tender Time but at or prior
to the Expiration Time, even if such Notes validly tendered after
the Early Tender Time but at or prior to the Expiration Time have a
higher Acceptance Priority Level than the Notes validly tendered
and not validly withdrawn at or prior to the Early Tender Time.
Furthermore, if Spectrum Brands purchases the Maximum Tender Offer
Amount of Notes on the Early Tender Settlement Date, Holders who
validly tender Notes after the Early Tender Time but on or before
the Expiration Time will not have any of their Notes accepted for
purchase. The Tender Offer may be subject to proration if the
aggregate purchase price (including principal and premium and
accrued and unpaid interest) of the Notes that are validly tendered
and not validly withdrawn is greater than the amount of Notes that
may be purchased for the Maximum Tender Offer Amount.
Spectrum Brands intends to fund the Total Consideration
(inclusive of the Early Tender Payment) and the Tender Offer
Consideration (including, in each case, accrued and unpaid interest
paid), plus all related fees and expenses, using cash on hand,
including proceeds from asset sales, proceeds from the liquidation
of short-term investments, and, if necessary, borrowings under its
revolving facility under its Amended and Restated Credit Agreement,
dated June 30, 2020, as amended through the date hereof. Notes that
are tendered and accepted in the Tender Offer will cease to be
outstanding and will be cancelled.
The terms and conditions of the Tender Offer are described in
the Notes Statement.
If less than all of the 2026 Notes, the 2029 Notes and the 2030
Notes are validly tendered and accepted for purchase in the Tender
Offer or Spectrum Brands does not receive sufficient consents to
effect the proposed amendments to the indentures governing such
Series, Spectrum Brands may be required to make subsequent offers
(“Asset Sale Offers”) pursuant to the requirements of the
“Limitation on Asset Sales” covenant in the respective indentures
governing such Series at a purchase price of 100.0% of the
principal amount of such Notes plus accrued and unpaid interest
using the net proceeds of the divestiture of Spectrum Brands’
Hardware and Home Improvement segment, completed on June 20, 2023,
that remain available for such Asset Sale Offers, if they are
required to be made.
Depending on the outcome of the Tender Offer for the 2026 Notes,
the 2029 Notes and the 2030 Notes, all or a significant amount of
the 2031 Notes may remain outstanding following the completion of
the Tender Offer. However, whether or not Spectrum Brands would be
required to make an Asset Sale Offer for the 2031 Notes, or the
2026 Notes, the 2029 Notes or the 2030 Notes, depends on the amount
of Notes tendered in the Tender Offer and any other actions that
Spectrum Brands may take before an Asset Sale Offer is required to
be made pursuant to the terms of the governing indenture, including
defeasance of the covenants applicable to the 2031 Notes pursuant
to the terms of the governing indenture, or the satisfaction and
discharge of the indenture governing the 2031 Notes.
Spectrum Brands and its affiliates reserve the right, in their
sole discretion, to redeem any of the Notes that remain
outstanding after the completion of the Tender Offer in accordance
with the terms of the respective indentures governing the Notes, to
repurchase any such Notes in open market purchases, privately
negotiated transactions or otherwise, upon such terms and at such
prices as they may determine, which in each case may be more or
less than the price to be paid pursuant to the Tender Offer, to
defease the covenants of the Notes, including the covenant on the
“Limitation on Asset Sales,” or to satisfy and discharge Spectrum
Brands’ obligations pursuant to the indentures governing such
Notes.
Spectrum Brands has retained RBC Capital Markets, LLC, J.P.
Morgan Securities LLC (with respect to the 2029 Notes, the 2030
Notes and the 2031 Notes, collectively, the “USD Notes”), J.P.
Morgan Securities plc (with respect to the Euro Notes) and UBS
Securities LLC to serve as the Dealer Managers for the Tender Offer
and Solicitation Agents for the Consent Solicitation. Requests for
documents may be directed to D.F. King, the Information and Tender
Agent at (800) 549-6864 (toll-free) or +44 (0) 20 7920 9700 (for
the Euro Notes). Questions regarding the Tender Offer may be
directed to RBC Capital Markets, LLC at (877) 381-2099 (toll-free)
or (212) 618-7843 (collect) (for the USD Notes) and at +44 20 7029
7529 (for the Euro Notes), to J.P. Morgan Securities LLC at (866)
834-4666 (toll-free) or (212) 834-7489 (collect) (for the USD
Notes), J.P. Morgan Securities plc (for the Euro Notes) at +44 20
7134 4353, or UBS Securities LLC at (833) 690-0971 (toll-free) or
(212) 882-5723 (collect).
This press release is for informational purposes only. The
Tender Offer and Consent Solicitation are being made solely by the
Notes Statement. This press release does not constitute an offer to
sell or the solicitation of an offer to buy any securities and
shall not constitute an offer, solicitation or sale in any
jurisdiction in which, or to any persons to whom, such offering,
solicitation or sale would be unlawful. Any offers of concurrently
offered securities will be made only by means of a private offering
memorandum. The Tender Offer and Consent Solicitation are not being
made to Holders of Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. In any jurisdiction in
which the securities laws or blue sky laws require the Tender Offer
or Consent Solicitation to be made by a licensed broker or dealer,
the Tender Offer and Consent Solicitation will be deemed to be made
on behalf of Spectrum Brands by the Dealer Managers and
Solicitation Agents, or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
None of Spectrum Brands, the Information and Tender Agent, the
Dealer Managers and Solicitation Agents or any of their respective
affiliates makes any recommendation as to whether Holders should
tender or refrain from tendering their Notes, and no person or
entity has been authorized by any of them to make such a
recommendation. Holders must make their own decision as to whether
to tender Notes and, if so, the principal amount of the Notes to
tender
About Spectrum Brands Holdings, Inc. and Spectrum Brands,
Inc.
Spectrum Brands Holdings is a home-essentials company with a
mission to make living better at home. We focus on delivering
innovative products and solutions to consumers for use in and
around the home through our trusted brands. We are a leading
supplier of specialty pet supplies, lawn and garden and home pest
control products, personal insect repellents, shaving and grooming
products, personal care products, and small household appliances.
Helping to meet the needs of consumers worldwide, Spectrum Brands
offers a broad portfolio of market-leading, well-known and widely
trusted brands including Tetra®, DreamBone®, SmartBones®, Nature’s
Miracle®, 8-in-1®, FURminator®, Healthy-Hide®, Good Boy®, Meowee!®,
OmegaOne®, Spectracide®, Cutter®, Repel®, Hot Shot®, Rejuvenate®,
Black Flag®, Liquid Fence®, Remington®, George Foreman®, Russell
Hobbs®, BLACK + DECKER®, PowerXL®, Emeril Lagasse®, and Copper
Chef®. For more information, please visit www.spectrumbrands.com.
Spectrum Brands – A Home Essentials Company™.
Forward-looking Statements
We have made or implied certain forward-looking statements in
this document and may make additional oral forward-looking
statements from time to time. All statements, other than statements
of historical facts included or incorporated by reference in this
document, including, without limitation, statements or expectations
regarding our business strategy, future operations, financial
condition, estimated revenues, projected costs, inventory
management, earnings power, projected synergies, prospects, plans
and objectives of management, outcome of any litigation and
information concerning expected actions of third parties are
forward-looking statements. When used in this document, the words
future, anticipate, pro forma, seek, intend, plan, envision,
estimate, believe, belief, expect, project, forecast, outlook,
earnings framework, goal, target, could, would, will, can, should,
may and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. Since these
forward-looking statements are based upon our current expectations
of future events and projections and are subject to a number of
risks and uncertainties, many of which are beyond our control and
some of which may change rapidly, actual results or outcomes may
differ materially from those expressed or implied herein, and you
should not place undue reliance on these statements. Important
factors that could cause our actual results to differ materially
from those expressed or implied herein include, without limitation:
(1) the economic, social and political conditions or civil unrest,
terrorist attacks, acts of war, natural disasters, other public
health concerns or unrest in the United States (“U.S.”) or the
international markets impacting our business, customers, employees
(including our ability to retain and attract key personnel),
manufacturing facilities, suppliers, capital markets, financial
condition and results of operations, all of which tend to aggravate
the other risks and uncertainties we face; (2) the impact of a
number of local, regional and global uncertainties could negatively
impact our business; (3) the negative effect of the Russia-Ukraine
war and the Israel-Hamas war and their impact on those regions and
surrounding regions, including the Middle East, and on our
operations and those operations of our customers, suppliers and
other stakeholders; (4) our increased reliance on third-party
partners, suppliers and distributors to achieve our business
objectives; (5) the impact of expenses resulting from the
implementation of new business strategies, divestitures or current
and proposed restructuring and optimization activities, including
changes in inventory and distribution center changes which are
complicated and involve coordination among a number of
stakeholders, including our suppliers and transportation and
logistics handlers; (6) the impact of our indebtedness and
financial leverage position on our business, financial condition
and results of operations; (7) the impact of restrictions in our
debt instruments on our ability to operate our business, finance
our capital needs or pursue or expand business strategies; (8) any
failure to comply with financial covenants and other provisions and
restrictions of our debt instruments; (9) the effects of general
economic conditions, including the impact of, and changes to
tariffs and trade policies, inflation, recession or fears of a
recession, depression or fears of a depression, labor costs and
stock market volatility or monetary or fiscal policies in the
countries where we do business; (10) the impact of fluctuations in
transportation and shipment costs, fuel costs, commodity prices,
costs or availability of raw materials or terms and conditions
available from suppliers, including suppliers’ willingness to
advance credit; (11) interest rate fluctuations; (12) changes in
foreign currency exchange rates that may impact our purchasing
power, pricing and margin realization within international
jurisdictions; (13) the loss of, significant reduction in or
dependence upon, sales to any significant retail customer(s),
including their changes in retail inventory levels and management
thereof; (14) competitive promotional activity or spending by
competitors, or price reductions by competitors; (15) the
introduction of new product features or technological developments
by competitors and/or the development of new competitors or
competitive brands; (16) changes in consumer spending preferences
and demand for our products, particularly in light of economic
stress; (17) our ability to develop and successfully introduce new
products, protect intellectual property and avoid infringing the
intellectual property of third parties; (18) our ability to
successfully identify, implement, achieve and sustain productivity
improvements, cost efficiencies (including at our manufacturing and
distribution operations) and cost savings; (19) the seasonal nature
of sales of certain of our products; (20) the impact weather
conditions may have on the sales of certain of our products; (21)
the effects of climate change and unusual weather activity as well
as our ability to respond to future natural disasters and pandemics
and to meet our environmental, social and governance goals; (22)
the cost and effect of unanticipated legal, tax or regulatory
proceedings or new laws or regulations (including environmental,
public health and consumer protection regulations); (23) public
perception regarding the safety of products that we manufacture and
sell, including the potential for environmental liabilities,
product liability claims, litigation and other claims related to
products manufactured by us and third parties; (24) the impact of
existing, pending or threatened litigation, government regulation
or other requirements or operating standards applicable to our
business; (25) the impact of cybersecurity breaches or our actual
or perceived failure to protect company and personal data,
including our failure to comply with new and increasingly complex
global data privacy regulations; (26) changes in accounting
policies applicable to our business; (27) our discretion to adopt,
conduct, suspend or discontinue any share repurchase program or
conduct any debt repayments, redemptions, repurchases or
refinancing transactions (including our discretion to conduct
purchases or repurchases, if any, in a variety of manners including
open-market purchases, privately negotiated transactions, tender
offers, redemptions, or otherwise); (28) our ability to utilize net
operating loss carry-forwards to offset tax liabilities; (29) our
ability to separate the Company's Home and Personal Care (“HPC”)
business and create an independent Global Appliances business on
expected terms, and within the anticipated time period, or at all,
and to realize the potential benefits of such business; (30) our
ability to create a pure play consumer products company composed of
our Global Pet Care ("GPC") and Home & Garden (“H&G”)
business and to realize the expected benefits of such creation, and
within the anticipated time period, or at all; (31) our ability to
successfully implement, and realize the benefits of, acquisitions
or dispositions and the impact of any such transactions on our
financial performance; (32) the impact of actions taken by
significant shareholders; (33) the unanticipated loss of key
members of senior management and the transition of new members of
our management teams to their new roles; and (34) the other risk
factors set forth in the securities filings of Spectrum Brands
Holdings, Inc. and SB/RH Holdings, LLC, including the 2023 Annual
Report and subsequent Quarterly Reports on Form 10-Q. Some of the
above-mentioned factors are described in further detail in the
sections entitled Risk Factors in our annual and quarterly reports,
as applicable. You should assume the information appearing in this
document is accurate only as of the date hereof, or as otherwise
specified, as our business, financial condition, results of
operations and prospects may have changed since such date. Except
as required by applicable law, including the securities laws of the
U.S. and the rules and regulations of the United States Securities
and Exchange Commission , we undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, to reflect actual
results or changes in factors or assumptions affecting such
forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20240519588701/en/
Investor/Media Contact: Joanne Chomiak
608-275-4458
Spectrum Brands (NYSE:SPB)
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