Esperion Announces Private Offering of $200.0 Million of Convertible Senior Subordinated Notes
November 10 2020 - 4:30PM
Esperion (NASDAQ: ESPR) today announced its intention to offer,
subject to market conditions and other factors, $200.0 million
aggregate principal amount of Convertible Senior Subordinated Notes
due 2025 (the “notes”) in a private offering (the “offering”) to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). In
connection with the offering, Esperion also expects to grant the
initial purchasers of the notes an option to purchase, for
settlement within a 13-day period beginning on, and including,
the date on which the notes are first issued, up to an additional
$30.0 million aggregate principal amount of the notes.
The notes will be senior unsecured obligations of
Esperion that are subordinated in right of payment to indebtedness,
obligations and other liabilities under Esperion’s revenue interest
purchase agreement, the revenue interests issued pursuant to such
agreement, and any refinancing of the foregoing. Interest on the
notes will be payable semi-annually in arrears. The notes will be
convertible under certain circumstances into cash, shares of
Esperion’s common stock or a combination thereof, at Esperion’s
election. The notes will mature on November 15, 2025, unless
earlier converted, redeemed or repurchased. The interest rate,
conversion rate and other terms of the notes are to be determined
upon pricing of the offering.
In connection with the pricing of the notes,
Esperion expects to enter into privately negotiated capped call
transactions with one or more of the initial purchasers of the
notes or their respective affiliates and/or other financial
institutions (the “option counterparties”). The capped call
transactions are expected generally to reduce potential dilution to
Esperion’s common stock upon conversion of any notes and/or offset
any potential cash payments Esperion is required to make in excess
of the principal amount of converted notes, as the case may be,
with such reduction and/or offset subject to a cap. If the initial
purchasers of the notes exercise their option to purchase
additional notes, Esperion expects to enter into additional capped
call transactions with the option counterparties.
In connection with establishing their initial
hedges of the capped call transactions, Esperion expects that the
option counterparties or their respective affiliates will purchase
shares of Esperion’s common stock and/or enter into various
derivative transactions with respect to Esperion’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 Esperion’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 derivatives with respect to Esperion’s
common stock and/or purchasing or selling Esperion’s common stock
or other securities of Esperion in secondary market transactions
following the pricing of the notes and prior to the maturity of the
notes (and are likely to do so on each exercise date for the capped
call transactions, which are expected to occur on each trading day
during the 40 trading day period beginning on the 41st scheduled
trading day prior to the maturity date of the notes, or following
any termination of any portion of the capped call transactions in
connection with any repurchase, redemption or early conversion of
the notes). This activity could also cause a decrease or avoid an
increase in the market price of Esperion’s common stock or the
notes, which could affect the ability of noteholders to convert the
notes and, to the extent the activity occurs following conversion
or during any observation period related to a conversion of notes,
it could affect the amount and value of the consideration that
noteholders will receive upon conversion of such notes.
In connection with the pricing of the notes,
Esperion also expects to enter into a prepaid forward stock
purchase transaction (the “prepaid forward”) with one of the
initial purchasers of the notes or its affiliate (the “forward
counterparty”), pursuant to which Esperion will purchase
approximately $50.0 million of its common stock (based on the last
reported sale price of Esperion’s common stock on the pricing
date), for settlement on the date that is the maturity date of the
notes, subject to any early settlement, in whole or in part, of the
prepaid forward. The prepaid forward is intended to facilitate
privately negotiated transactions by which investors in the notes
will be able to hedge their investment.
In connection with establishing its initial hedge
of the prepaid forward, Esperion expects that the forward
counterparty or its affiliate will enter into one or more
derivative transactions with respect to Esperion’s common stock
with purchasers of the notes concurrently with or after the pricing
of the notes. The prepaid forward is intended to allow investors to
establish short positions that generally correspond to (but may be
greater than) commercially reasonable initial hedges of their
investment in the notes. In the event of such greater initial
hedges, investors may offset such greater portion by
purchasing Esperion's common stock on the day of pricing of
the notes. Facilitating investors’ hedge positions by entering into
the prepaid forward, particularly if investors
purchase Esperion's common stock on the pricing date, could
increase (or reduce the size of any decrease in) the market price
of Esperion's common stock and effectively raise the initial
conversion price of the notes.
In addition, the forward counterparty or its
affiliate may modify its hedge position by entering into or
unwinding one or more derivative transactions with respect
to Esperion's common stock and/or purchasing or selling the
common stock or other securities of Esperion in secondary market
transactions at any time following the pricing of the notes and
prior to the maturity of the notes. These activities could also
cause or avoid an increase or a decrease in the market price
of Esperion's common stock or the notes.
Esperion intends to use a portion of the net
proceeds from the offering to pay the cost of the capped call
transactions and to finance the prepaid forward. Esperion intends
to use the remainder of the net proceeds from the offering for
general corporate purposes, including potential in-licensing
opportunities. If the option granted to the initial purchasers to
purchase additional notes is exercised, Esperion expects to use a
portion of the net proceeds from the sale of additional notes to
enter into additional capped call transactions. Esperion expects to
use the remaining net proceeds for general corporate purposes as
described above.
The notes will only be offered to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act. Neither the notes nor the shares of Esperion’s common stock
potentially issuable upon conversion of the notes, if any, have
been, or will be, registered under the Securities Act or the
securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This announcement is neither an offer to sell nor a
solicitation of an offer to buy any of these securities and shall
not constitute an offer, solicitation or sale in any jurisdiction
in which such offer, solicitation or sale is unlawful.
Esperion Therapeutics
Through scientific and clinical excellence, and a
deep understanding of cholesterol biology, the experienced Lipid
Management Team at Esperion is committed to developing new LDL-C
lowering medicines that will make a substantial impact on reducing
global cardiovascular disease, the leading cause of death around
the world.
Forward-Looking StatementsThis
press release contains “forward-looking” statements that are made
pursuant to the safe harbor provisions of the federal securities
laws, including statements regarding whether Esperion will offer
and issue the notes and the terms of the notes, the anticipated use
of the net proceeds from the offering, Esperion’s expectations in
respect of granting the initial purchasers an option to purchase
additional notes and expectations regarding the effect of the
capped call transactions and prepaid forward and regarding actions
of the option counterparties, the forward counterparty and/or their
respective affiliates. Any express or implied statements contained
in this press release that are not statements of historical fact
may be deemed to be forward-looking statements. Forward-looking
statements involve risks and uncertainties that could cause actual
results to differ significantly from those projected, including,
without limitation, the risk that Esperion will not be able to
consummate the offering on the expected terms, or at all, because
of market conditions or otherwise, the risk that the actual use of
net proceeds from the offering, if consummated, will differ from
the intended use of net proceeds because of market conditions or
otherwise and risks detailed in Esperion’s filings with the
Securities and Exchange Commission. Any forward-looking statements
contained in this press release speak only as of the date hereof,
and Esperion disclaims any obligation or undertaking to update or
revise any forward-looking statements contained in this press
release, other than to the extent required by law.
Contact:Kaitlyn Brosco
Esperioninvestorrelations@esperion.com
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