The Cheesecake Factory Incorporated (NASDAQ: CAKE) (the
“Company”) today announced the pricing of its concurrent public
offerings of $300,000,000 aggregate principal amount of 0.375%
convertible senior notes due 2026 (the “notes”) and 3,125,000
shares of common stock, at a public offering price of $56.00 per
share. The issuance and sale of the notes and common stock are
scheduled to settle on June 15, 2021, subject to customary closing
conditions. The Company also granted the underwriters of the note
offering a 30-day option to purchase up to an additional
$45,000,000 principal amount of notes solely to cover
over-allotments and granted the underwriters of the common stock
offering a 30-day option to purchase up to an additional 468,750
shares of common stock solely to cover over-allotments. The
completion of the note offering will not be contingent on the
completion of the common stock offering, and the completion of the
common stock offering will not be contingent on the completion of
the note offering.
The Company estimates that the net proceeds from the note
offering will be approximately $291.0 million (or approximately
$334.8 million if the underwriters of the note offering fully
exercise their option to purchase additional notes), after
deducting the underwriting discounts and commissions and estimated
offering expenses. The Company estimates that the net proceeds from
the common stock offering will be approximately $166.9 million (or
approximately $192.0 million if the underwriters of the common
stock offering fully exercise their option to purchase additional
shares of common stock), after deducting the underwriting discounts
and commissions and estimated offering expenses. The Company
intends to use the net proceeds from the offerings to fund the cash
consideration of approximately $457.4 million payable in the
preferred stock repurchase and conversion described below to
simplify the capital structure. The Company intends to use the
remaining net proceeds for general corporate purposes, including
the repayment of debt under the Company’s revolving credit
facility.
The Company has entered into agreements with the holders of its
outstanding Series A convertible preferred stock pursuant to which
the Company will repurchase 150,000 shares of the outstanding
Series A convertible preferred stock for approximately $447.0
million in cash and the holder of the remaining outstanding Series
A convertible preferred stock will convert the remaining 50,000
shares of the outstanding Series A convertible preferred stock into
approximately 2.4 million shares of the Company’s common stock and
receive approximately $10.4 million in cash in connection with such
conversion. The preferred stock repurchase and conversion are
expected to close on June 15, 2021, subject to customary closing
conditions and will be contingent on the completion of the note
offering and the common stock offering.
The notes will be senior, unsecured obligations of the Company
and will accrue interest at a rate of 0.375% per annum, payable
semi-annually in arrears on June 15 and December 15 of each year,
beginning on December 15, 2021. The notes will mature on June 15,
2026, unless earlier repurchased, redeemed or converted. Before
February 17, 2026, noteholders will have the right to convert their
notes only upon the occurrence of certain events. From and after
February 17, 2026, noteholders may convert their notes at any time
at their election until the close of business on the second
scheduled trading day immediately before the maturity date. Upon
conversion, the Company will settle the conversion value in cash up
to the principal amount being converted and any excess of the
conversion value over the principal amount in cash, shares of
common stock or a combination thereof, at the Company’s election.
The initial conversion rate is 12.7551 shares of common stock per
$1,000 principal amount of notes, which represents an initial
conversion price of approximately $78.40 per share of common stock.
The initial conversion price represents a premium of approximately
40% over the public offering price per share of common stock in the
common stock offering. The conversion rate will be subject to
adjustment upon the occurrence of certain events.
The notes will be redeemable, in whole or in part (subject to
certain limitations), for cash at the Company’s option at any time,
and from time to time, on or after June 20, 2024 and on or before
the 30th scheduled trading day immediately before the maturity
date, but only if the last reported sale price per share of the
Company’s common stock exceeds 130% of the conversion price for a
specified period of time. The redemption price will be equal to the
principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption
date.
If a “fundamental change” (as defined in the indenture for the
notes) occurs, then, subject to a limited exception, noteholders
may require the Company to repurchase their notes for cash. The
repurchase price will be equal to the principal amount of the notes
to be repurchased, plus accrued and unpaid interest, if any, to,
but excluding, the applicable repurchase date.
J.P. Morgan, BNP PARIBAS, BofA Securities and Wells Fargo
Securities are acting as joint book-running managers for the
offerings.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities referred to in this
press release, nor will there be any sale of any such securities,
in any state or other jurisdiction in which such offer, sale or
solicitation would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction.
We have filed a registration statement (including a prospectus)
and preliminary prospectus supplements with the SEC for the
offerings to which this communication relates. Before you invest,
you should read the applicable preliminary prospectus supplement
and the prospectus in that registration statement and other
documents we have filed with the SEC for more complete information
about us and these offerings. You may get these documents free by
visiting EDGAR on the SEC website at www.sec.gov. Alternatively,
we, any underwriter or any dealer participating in the applicable
offering will arrange to send you the applicable preliminary
prospectus supplement (or, when available, the applicable final
prospectus supplement) and the accompanying prospectus upon request
to: J.P. Morgan Securities LLC, Attention: c/o Broadridge Financial
Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by
telephone at (866) 803-9204.
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated is a leader in experiential
dining. We are culinary forward and relentlessly focused on
hospitality. Delicious, memorable experiences created by passionate
people—this defines who we are and where we are going. We currently
own and operate 300 restaurants throughout the United States and
Canada under brands including The Cheesecake Factory®, North
Italia® and a collection within our Fox Restaurant Concepts
business. Internationally, 28 The Cheesecake Factory® restaurants
operate under licensing agreements. Our bakery division operates
two facilities that produce quality cheesecakes and other baked
products for our restaurants, international licensees and
third-party bakery customers.
Forward-Looking Statements
This press release includes forward-looking statements,
including statements regarding the completion of the offerings, the
preferred stock repurchase and conversion and the expected amount
and intended use of the net proceeds from the offerings.
Forward-looking statements represent the Company’s current
expectations regarding future events and are subject to known and
unknown risks and uncertainties that could cause actual results to
differ materially from those implied by the forward-looking
statements. Among those risks and uncertainties are market
conditions, the satisfaction of the closing conditions related to
the preferred stock repurchase and conversion and the offerings and
risks relating to the Company’s business, including those described
in periodic reports that the Company files from time to time with
the SEC. The Company may not consummate the preferred stock
repurchase and conversion or the offerings described in this press
release and, if the offerings are consummated, cannot provide any
assurances regarding its ability to effectively apply the net
proceeds as described above. The forward-looking statements
included in this press release speak only as of the date of this
press release, and the Company does not undertake to update the
statements included in this press release for subsequent
developments, except as may be required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20210610006032/en/
Stacy Feit (818) 871-3000
investorrelations@thecheesecakefactory.com
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