SAN MATEO, Calif., April 5, 2017 /PRNewswire/ -- GoPro, Inc.
(NASDAQ: GPRO) today announced that it proposes to offer
$150 million aggregate principal
amount of convertible senior notes due 2022 (the "notes"), subject
to market conditions and other factors. The notes are to be offered
and sold in a private placement to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Act").
The notes will be senior, unsecured obligations of GoPro, and
interest will be payable semi-annually in arrears.
The notes will mature on April 15,
2022, unless earlier converted or repurchased in accordance
with the terms of the notes. Prior to January 15, 2022, the notes will be convertible
at the option of holders only upon satisfaction of certain
conditions and during certain periods, and thereafter, at any time
until the close of business on the second scheduled trading day
immediately preceding the maturity date. Upon conversion, the notes
may be settled in shares of GoPro's Class A common stock (the
"Class A common stock"), cash or a combination of cash and shares
of Class A common stock, at the election of GoPro.
Holders of the notes will have the right to require GoPro to
repurchase for cash all or a portion of their notes at 100% of
their principal amount, plus any accrued and unpaid interest, upon
the occurrence of a fundamental change (as defined in the indenture
relating to the notes). GoPro will also be required to increase the
conversion rate for holders who convert their notes in connection
with certain fundamental changes occurring prior to the maturity
date.
The interest rate, conversion rate, offering price and other
terms are to be determined upon pricing of the notes.
GoPro expects to use a portion of the net proceeds of the
offering of the notes to pay the aggregate prepayment of the
prepaid forward described below and to use the remaining net
proceeds from the offering of the notes for general corporate
purposes.
In connection with the issuance of the notes, GoPro expects to
enter into a privately negotiated prepaid forward stock purchase
transaction (the "prepaid forward") with an affiliate of an initial
purchaser in this offering (the "forward counterparty"), pursuant
to which GoPro will purchase shares of Class A common stock, for
settlement on or around April 15,
2022, subject to any early settlement, in whole or in part,
of each prepaid forward. In the event that GoPro pays any cash
dividends on the Class A common stock, the forward counterparty
will pay an equivalent amount to GoPro. The prepaid forward is
intended to facilitate privately negotiated derivative transactions
by which investors in the notes will be able to hedge their
investment in the notes.
In connection with establishing its initial hedge of the prepaid
forward, the forward counterparty (or its affiliate) expects to
enter into one or more derivative transactions with respect to the
Class A common stock with purchasers of the notes concurrently with
or after the pricing of the notes. The prepaid forward is intended
to reduce the dilution to our stockholders from the issuance of the
notes and to allow certain investors to establish short positions
that generally correspond to commercially reasonable initial hedges
of their investment in the notes. The notional size of the prepaid
forward will correspond to the notional size of the aggregate
initial hedge position of such investors. It is possible, however,
that investors may seek to execute larger initial hedge positions,
in which case such investors may offset such larger initial hedge
positions by purchasing the Class A common stock on the pricing
date. Facilitating investors' hedge positions by entering into the
prepaid forward, particularly if investors purchase the Class A
common stock on the pricing date, could increase (or reduce the
size of any decrease in) the market price of the Class A common
stock or the notes 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 the Class A common stock
and/or purchasing or selling the Class A common stock or other
securities of ours in secondary market transactions at any time,
including following the pricing of the notes and immediately prior
to or shortly after April 15, 2022
(and are likely to unwind their derivative transactions and/or
purchase or sell the Class A common stock in connection with any
conversion or repurchase of the notes, in connection with the
purchase or sale of notes by certain investors and/or in the event
that sufficient borrow of the Class A common stock becomes
available). These activities could also cause or avoid an increase
or a decrease in the market price of the Class A common stock or
the notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
the Class A common stock, if any, into which the notes are
convertible) and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offer, solicitation or sale
is unlawful. Any offers of the notes will be made only by means of
a private offering memorandum.
The notes and any shares of the Class A common stock issuable
upon conversion of the notes have not been registered under the
Act, or any state securities laws and may not be offered or sold in
the United States absent
registration or an applicable exemption from such registration
requirements.
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SOURCE GoPro