CHARLOTTE, N.C., May 24, 2017 /PRNewswire/ -- LendingTree, Inc.
(NASDAQ: TREE) (the "Company"), a leading online loan marketplace,
announced today the pricing of its private offering of $265 million aggregate principal amount of its
0.625% convertible senior notes due 2022 (the "notes"). The
size of the offering was increased from the previously announced
$200 million in aggregate principal
amount. The Company also granted the initial purchasers a
30-day option to purchase up to an additional $35 million aggregate principal amount of notes,
solely to cover over-allotments, if any. The sale of the notes to
the initial purchasers is expected to settle on or about
May 31, 2017, subject to customary
closing conditions, and is expected to result in approximately
$256.7 million in net proceeds to the
Company, after deducting the initial purchasers' discount and
estimated offering expenses payable by the Company (assuming no
exercise of the initial purchasers' over-allotment option) but
before deducting the net cost of the convertible note hedge and
warrant transactions referred to below.
The notes will be senior unsecured obligations of the
Company. The notes will bear interest at a rate of 0.625%,
payable semiannually in arrears on June
1 and December 1 of each year,
beginning on December 1, 2017. The
notes will mature on June 1, 2022,
unless earlier repurchased or converted.
The initial conversion rate for the notes is 4.8163 shares of
the Company's common stock per $1,000
principal amount of notes (which is equivalent to an initial
conversion price of approximately $207.63 per share). Prior to February 1, 2022, the notes will be convertible
at the option of the holders only upon the occurrence of specified
events, and thereafter until the close of business on the second
scheduled trading day immediately preceding the maturity date, the
notes will be convertible at any time. Upon conversion, the notes
will settle for cash, shares of the Company's common stock, or a
combination thereof, at the Company's option. The Company expects
to use approximately $16.0 million of
the net proceeds from the sale of the notes to pay the net cost of
the convertible note hedge transactions (after such cost is
partially offset by the proceeds to the Company of the warrant
transactions), and the Company intends to use the remainder of the
proceeds to pay related transaction fees and expenses, and for
general corporate purposes including, but not limited to, working
capital and potential acquisitions.
If the initial purchasers exercise their option to purchase
additional notes, the Company may sell additional warrants and use
a portion of the net proceeds from the sale of the additional
notes, together with the proceeds from the sale of the additional
warrants to enter into additional convertible note hedge
transactions. Any remaining proceeds will be used for general
corporate purposes including, but not limited to, working capital
and potential acquisitions.
In connection with the offering, the Company entered into
convertible note hedge transactions with certain financial
institutions, including certain affiliates of the initial
purchasers of the notes (in this capacity, the "option
counterparties"). The Company also entered into warrant
transactions with the option counterparties. The convertible note
hedge transactions are expected generally to reduce potential
dilution to the Company's common stock upon any conversion of notes
and/or offset any cash payments the Company is required to make in
excess of the principal amount of converted notes, as the case may
be. However, the warrant transactions could separately have a
dilutive effect to the extent that the market value per share of
the Company's common stock exceeds upon expiration the applicable
strike price of the warrants. The strike price of the warrant
transactions will initially be $266.39 per share, which represents a premium of
70% over the last reported sale price of the common stock on
May 24, 2017, and is subject to
certain adjustments under the terms of the warrant
transactions.
In connection with establishing their initial hedges of the
convertible note hedge and warrant transactions, the option
counterparties or their respective affiliates expect to enter into
various derivative transactions with respect to the Company's
common stock concurrently with or shortly after the pricing of the
notes. This activity could increase (or reduce the size of any
decrease in) the market price of the Company's common stock or the
notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivative transactions with respect to the
Company's common stock and/or purchasing or selling the Company's
common stock or other securities of the Company in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so during any
observation period related to a conversion of notes). This activity
could also cause or avoid an increase or a decrease in the market
price of the Company'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, it could affect the number of shares and
value of the consideration that noteholders will receive upon
conversion of the notes.
The offering was made to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). Neither the notes nor any shares of the
Company's common stock issuable upon conversion of the notes have
been or are expected to be registered under the Securities Act, or
under any state securities laws and, unless so registered, may not
be offered or sold in the United
States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy the notes in the offering, nor
shall there be any sale of such notes in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
The matters contained in the discussion above may be considered
to be "forward-looking statements" within the meaning of the
Securities Act and the Securities Exchange Act of 1934, as amended
by the Private Securities Litigation Reform Act of 1995, as
amended. Those statements include statements regarding the intent,
belief or current expectations or anticipations of the Company and
members of its management team. Factors currently known to
management that could cause actual results to differ materially
from those in forward-looking statements include the following:
adverse conditions in the United
States or global capital markets; adverse conditions in the
primary and secondary mortgage markets and in the economy,
particularly interest rates; default rates on loans, particularly
unsecured loans; demand by investors for unsecured personal loans;
the effect of such demand on interest rates for personal loans and
consumer demand for personal loans; seasonality of results;
potential liabilities to secondary market purchasers; changes in
the Company's relationships with network lenders, including
dependence on certain key network lenders; breaches of network
security or the misappropriation or misuse of personal consumer
information; failure to provide competitive service; failure to
maintain brand recognition; ability to attract and retain customers
in a cost-effective manner; the effects of potential acquisitions
of other businesses, including the ability to integrate them
successfully with the Company's existing operations; accounting
rules related to contingent consideration and excess tax benefits
or expenses on stock-based compensation that could materially
affect earnings in future periods; ability to develop new products
and services and enhance existing ones; competition; allegations of
failure to comply with existing or changing laws, rules or
regulations, or to obtain and maintain required licenses; failure
of network lenders or other affiliated parties to comply with
regulatory requirements; failure to maintain the integrity of
systems and infrastructure; liabilities as a result of privacy
regulations; failure to adequately protect intellectual property
rights or allegations of infringement of intellectual property
rights; and changes in management. These and additional
factors to be considered are set forth under "Risk Factors" in the
Company's Annual Report on Form 10-K for the period ended
December 31, 2016 and other filings
with the Securities and Exchange Commission. The Company undertakes
no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results or expectations.
About LendingTree, Inc.
LendingTree, Inc. operates the nation's leading online loan
marketplace and provides consumers with an array of online tools
and information to help them find the best loans for their needs.
LendingTree's online marketplace connects consumers with multiple
lenders that compete for their business, empowering consumers as
they comparison-shop across a full suite of loans and credit-based
offerings. Since its inception, LendingTree has facilitated more
than 65 million loan requests. LendingTree provides access to its
network of over 500 lenders offering home loans, home equity
loans/lines of credit, reverse mortgages, personal loans, auto
loans, small business loans, credit cards, student loans and
more.
LendingTree, Inc. is headquartered in Charlotte, NC and maintains operations solely
in the United States.
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SOURCE LendingTree, Inc.