The Kraft Heinz Company (“Kraft Heinz”) (Nasdaq: KHC) announced
today the pricing terms of the previously announced offer by its
100% owned operating subsidiary Kraft Heinz Foods Company (the
“Issuer”) to purchase for cash (the “Tender Offer”) for any validly
tendered (and not subsequently validly withdrawn and accepted for
purchase) notes up to a combined aggregate purchase price
(excluding accrued and unpaid interest) of $2.5 billion (the
“Maximum Tender Amount”) of its outstanding 3.500% senior notes due
June 2022 (the “June 2022 Notes”), 3.500% senior notes due July
2022 (the “July 2022 Notes”), 4.000% senior notes due 2023 (the
“2023 Notes”) and 4.875% second lien senior secured notes due 2025
(the “2025 Notes” and, together with the June 2022 Notes, the July
2022 Notes and the 2023 Notes, the “Notes” and each, a “Series” of
Notes).
The terms and conditions of the Tender Offer are described in
the offer to purchase dated September 11, 2019, as amended by a
supplement dated September 11, 2019 (together, the “Offer to
Purchase”).
Kraft Heinz will pay holders who validly tendered and did not
validly withdraw their Notes at or prior to 5:00 p.m., New York
City time, on September 24, 2019, unless extended with respect to
any Series of Notes (the “Early Tender Time”), $1,026.61 for each
$1,000 principal amount of its June 2022 Notes accepted for
purchase, $1,026.08 for each $1,000 principal amount of its July
2022 Notes accepted for purchase, $1,045.36 for each $1,000
principal amount of its 2023 Notes accepted for purchase, $1,032.17
for each $1,000 principal amount of its 2025 Notes accepted for
purchase plus, in each case, accrued and unpaid interest in respect
of such Notes from the last interest payment date to, but
excluding, the Early Settlement Date (as defined below) (as to each
Series of Notes, the “Total Tender Offer Consideration”), which
includes the applicable Early Tender Premium as set forth in the
table below. The Total Tender Offer Consideration was determined in
the manner described in the Offer to Purchase by reference to the
fixed spread for the Notes specified below plus the yield based on
the bid-side price of the U.S. Treasury Reference Security
specified below, as quoted on the Bloomberg Reference Page
specified below, as of 10:00 a.m., New York City time today (the
“Price Determination Date”).
CUSIP No. / ISIN
Title of Security
Aggregate Principal Amount
Outstanding
Acceptance Priority
Level
Reference Treasury
Security
Bloomberg Reference
Page
Fixed Spread(1) (bps)
Early Tender
Premium(2)
Total Tender Offer
Consideration
Principal Amount
Tendered
Principal Amount
Accepted
Proration Factor(3)
50076QAZ9 / US50076QAZ90
(144A):
50076QAF3 / US50076QAF37
(Reg S):
U5009CAC4 / USU5009CAC48
3.500% Senior Notes due June
2022
$2,000,000,000
1
1.500% U.S. Treasury due
8/15/22
FIT1
+90
$30.00
$1,026.61
$880,616,000
$880,616,000
100%
50077LAJ5 / US50077LAJ52
(144A):
423074BA0 / US423074BA02
(Reg S):
U42314AF8 / USU42314AF82
3.500% Senior Notes due July
2022
$1,000,000,000
2
1.500% U.S. Treasury due
8/15/22
FIT1
+90
$30.00
$1,026.08
$554,139,000
$554,139,000
100%
50077L AS5 / US50077LAS51
4.000% Senior Notes due 2023
$1,600,000,000
3
1.250% U.S. Treasury due
8/31/24
FIT1
+115
$30.00
$1,045.36
$761,869,000
$761,869,000
100%
(144A):
423074AS2 / US423074AS29
(Reg S):
U42314AA9 / USU42314AA95
4.875% Second Lien Senior Secured
Notes due 2025
$1,200,000,000
4
1.375% U.S. Treasury due
2/15/20
FIT3
+75
$30.00
$1,032.17
$706,700,000
$223,734,000
31.7%
(1) Fixed Spread includes the Early Tender Premium.
(2) Per $1,000 principal amount of Notes validly tendered and
accepted for purchase (the “Early Tender Premium”).
(3) Proration Factor is rounded to the nearest tenth of one
percent.
Settlement for Notes that are validly tendered and not validly
withdrawn at or prior to the Early Tender Time and that are
accepted for purchase, will be September 26, 2019 (the “Early
Settlement Date”), two business days following the Early Tender
Time.
The Tender Offer will expire at 11:59 p.m., New York City time,
on October 8, 2019, unless extended or earlier terminated as
described in the Offer to Purchase (such time and date, as they may
be extended, the “Expiration Time”). According to the terms and
conditions of the Offer to Purchase, if the Tender Offer is fully
subscribed as of the Early Tender Time, holders who validly tender
their Notes after the Early Tender Time will not have any of their
Notes accepted for purchase. Notes not accepted for purchase will
be promptly returned or credited to the holder’s account.
Kraft Heinz has engaged BofA Merrill Lynch, Citigroup, Goldman
Sachs & Co. LLC, and J.P. Morgan to act as dealer managers
(collectively, the “Dealer Managers”) in connection with the Tender
Offer and has appointed Global Bondholder Services Corporation to
serve as the tender agent and information agent for the Tender
Offer. Copies of the Offer to Purchase are available at
https://www.gbsc-usa.com/kraftheinzcompany/ or by contacting Global
Bondholder Services Corporation via telephone by calling +1 (866)
794-2200 (toll free) or +1 212-430-3774 (for banks and brokers).
Questions regarding the terms of the Tender Offer should be
directed to BofA Merrill Lynch at (980) 387-3907 (toll free) or
(888) 292-0070 (collect), Citigroup at (800) 558-3745 (toll free)
or (212) 723-6106 (collect), Goldman Sachs & Co. LLC at (800)
828-3182 (toll free) or (212) 357-0215 (collect) or J.P. Morgan at
(866) 834-4666 (toll free) or (212) 834-8553 (collect).
Neither the Issuer, Kraft Heinz, their boards of directors or
boards of managers, as applicable, the Dealer Managers, Global
Bondholder Services Corporation nor the trustees for the Notes, or
any of their respective affiliates, is making any recommendation as
to whether holders should tender any Notes in response to the
Tender Offer. Holders must make their own decision as to whether to
tender any of their Notes and, if so, the principal amounts of
Notes to tender.
This press release is for informational purposes only and is not
an offer to purchase, a solicitation of an offer to purchase or a
solicitation of consents with respect to any securities. This press
release does not describe all the material terms of the Tender
Offer, and no decision should be made by any holder on the basis of
this press release. The terms and conditions of the Tender Offer
are described in the Offer to Purchase, and this press release must
be read in conjunction with the Offer to Purchase. The Offer to
Purchase contains important information which should be read
carefully before any decision is made with respect to the Tender
Offer. If any holder is in any doubt as to the contents of this
press release, or the Offer to Purchase, or the action it should
take, it is recommended to seek its own financial and legal advice,
including in respect of any tax consequences, immediately from its
stockbroker, bank manager, solicitor, accountant or other
independent financial, tax or legal adviser. Any individual or
company whose Notes are held on its behalf by a broker, dealer,
bank, custodian, trust company or other nominee must contact such
entity if it wishes to tender such Notes pursuant to the Tender
Offer.
ABOUT THE KRAFT HEINZ COMPANY
For 150 years, we have produced some of the world’s most beloved
products at The Kraft Heinz Company (Nasdaq: KHC). Our Vision is To
Be the Best Food Company, Growing a Better World. We are one of the
largest global food and beverage companies, with 2018 net sales of
approximately $26 billion. Our portfolio is a diverse mix of iconic
and emerging brands. As the guardians of these brands and the
creators of innovative new products, we are dedicated to the
sustainable health of our people and our planet. To learn more,
visit www.kraftheinzcompany.com or follow us on LinkedIn and
Twitter.
FORWARD-LOOKING STATEMENTS
This press release contains a number of forward-looking
statements. Words such as “anticipate,” “reflect,” “invest,” “see,”
“make,” “expect,” “give,” “deliver,” “drive,” “believe,” “improve,”
“assess,” “reassess,” “remain,” “evaluate,” “grow,” “will,” “plan,”
“intend” and variations of such words and similar future or
conditional expressions are intended to identify forward-looking
statements. Examples of forward-looking statements include, but are
not limited to, statements regarding Kraft Heinz’s plans and
expected timing and benefits of the transaction, and the Late
Tender Offer Consideration or Total Tender Offer Consideration, as
applicable, to be paid to holders of the Notes who tender their
Notes at or prior to the Early Tender Time or the Expiration Time.
These forward-looking statements are not guarantees of future
performance and are subject to a number of risks and uncertainties,
many of which are difficult to predict and beyond Kraft Heinz’s
control.
Important factors that may affect Kraft Heinz’s business and
operations and that may cause actual results to differ materially
from those in the forward-looking statements include, but are not
limited to, the completion of the Tender Offer; operating in a
highly competitive industry; Kraft Heinz’s ability to correctly
predict, identify, and interpret changes in consumer preferences
and demand, to offer new products to meet those changes, and to
respond to competitive innovation; changes in the retail landscape
or the loss of key retail customers; changes in Kraft Heinz’s
relationships with significant customers, suppliers and other
business relationships; Kraft Heinz’s ability to maintain, extend,
and expand Kraft Heinz’s reputation and brand image; Kraft Heinz’s
ability to leverage Kraft Heinz’s brand value to compete against
private label products; Kraft Heinz’s ability to drive revenue
growth in its key product categories, increase Kraft Heinz’s market
share, or add products that are in faster-growing and more
profitable categories; product recalls or product liability claims;
unanticipated business disruptions; Kraft Heinz’s ability to
identify, complete, or realize the benefits from strategic
acquisitions, alliances, divestitures, joint ventures, or other
investments; Kraft Heinz’s ability to realize the anticipated
benefits from prior or future streamlining actions to reduce fixed
costs, simplify or improve processes, and improve Kraft Heinz’s
competitiveness; Kraft Heinz’s ability to successfully execute
Kraft Heinz’s strategic initiatives; the impacts of Kraft Heinz’s
international operations; economic and political conditions in the
United States and in various other nations where Kraft Heinz does
business; changes in Kraft Heinz’s management team or other key
personnel and Kraft Heinz’s ability to hire or retain key personnel
or a highly skilled and diverse global workforce; risks associated
with information technology and systems, including service
interruptions, misappropriation of data, or breaches of security;
impacts of natural events in the locations in which Kraft Heinz or
Kraft Heinz’s customers, suppliers, distributors, or regulators
operate; Kraft Heinz’s ownership structure; Kraft Heinz’s
indebtedness and ability to pay such indebtedness; additional
impairments of the carrying amounts of goodwill or other
indefinite-lived intangible assets; exchange rate fluctuations;
volatility in commodity, energy, and other input costs; volatility
in the market value of all or a portion of the derivatives Kraft
Heinz uses; increased pension, labor and people-related expenses;
compliance with laws, regulations, and related interpretations and
related legal claims or other regulatory enforcement actions,
including additional risks and uncertainties related to Kraft
Heinz’s restatement and any potential actions resulting from the
Securities and Exchange Commission’s (the “SEC”) ongoing
investigation, as well as potential additional subpoenas,
litigation and regulatory proceedings; an inability to remediate
the material weaknesses in Kraft Heinz’s internal control over
financial reporting or additional material weaknesses or other
deficiencies in the future or the failure to maintain an effective
system of internal controls; Kraft Heinz’s failure to prepare and
timely file its periodic reports; the restatement of certain of
Kraft Heinz’s previously issued consolidated financial statements,
which resulted in unanticipated costs and may affect investor
confidence and raise reputational issues; Kraft Heinz’s ability to
protect intellectual property rights; tax law changes or
interpretations; the impact of future sales of Kraft Heinz's common
stock in the public markets; Kraft Heinz’s ability to continue to
pay a regular dividend and the amounts of any such dividends; and
the volatility of capital markets and other macroeconomic factors
and other factors. For additional information on these and other
factors that could affect Kraft Heinz’s forward-looking statements,
see Kraft Heinz’s risk factors, as they may be amended from time to
time, set forth in its filings with the SEC. Kraft Heinz disclaims
and does not undertake any obligation to update or revise any
forward-looking statement in this press release, except as required
by applicable law or regulation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190925005959/en/
Michael Mullen (media) Head of Corporate Affairs The Kraft Heinz
Company Michael.Mullen@kraftheinz.com
Christopher Jakubik, CFA (investors) Head of Global Investor
Relations The Kraft Heinz Company ir@kraftheinz.com
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