CHARLOTTE, N.C., July 21, 2020 /PRNewswire/ -- LendingTree,
Inc. (NASDAQ: TREE) (the "Company"), a leading online loan
marketplace, announced today the pricing of its private offering of
$500.0 million aggregate
principal amount of its 0.50% convertible senior notes due 2025
(the "notes"). The Company also granted the initial purchasers 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 $75.0 million
aggregate principal amount of notes. The sale of the notes to the
initial purchasers is expected to settle on or about July 24, 2020, subject to customary closing
conditions, and is expected to result in approximately $486.6 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' 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 0.50% per annum, payable
semiannually in arrears on January 15
and July 15 of each year, beginning
on January 15, 2021. The notes will
mature on July 15, 2025, unless
earlier repurchased, redeemed or converted.
The initial conversion rate for the notes is 2.1683 shares
of the Company's common stock per $1,000 principal amount of notes (which is
equivalent to an initial conversion price of approximately
$461.19 per share, which
represents a premium of approximately 30.0% over the last reported
sale price of the Company's common stock on July 21, 2020). Prior to March 13, 2025, 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 notes will be
redeemable, in whole or in part, for cash at the Company's option
at any time, and from time to time, on or after July 20, 2023 and before the 41st 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.
The Company expects to use $54.8 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
approximately $234.0 million of
the net proceeds from this offering to repurchase approximately
$130.3 million principal amount
of the Company's 0.625% Convertible Senior Notes due 2022 (the
"2022 notes"). The Company intends to use the remainder of the net
proceeds from this offering 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 described above.
In connection with the offering, the Company entered into
convertible note hedge 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 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 upon
expiration exceeds the applicable strike price of the warrants. The
strike price of the warrant transactions will initially be
$709.52 per share, which represents a premium of
100.0% over the last reported sale price of the common stock
on July 21, 2020, 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.
Concurrently with the offering, the Company has entered into
separate and individually negotiated transactions with certain
holders of the 2022 notes to repurchase for cash approximately
$130.3 million in aggregate principal
amount of the 2022 notes on terms negotiated with each holder (the
"note repurchases"). The Company expects that holders of the
2022 notes that have sold their 2022 notes to the Company in any
note repurchase transaction may enter into or unwind various
derivatives with respect to the Company's common stock and/or
purchase or sell shares of the Company's common stock in the market
to hedge their exposure in connection with these transactions. In
particular, the Company expects that many holders of the 2022 notes
employ a convertible arbitrage strategy with respect to the 2022
notes and have a short position with respect to the Company's
common stock that they would close, through purchases of the
Company's common stock and/or the entry into or unwind of
economically equivalent derivatives transactions with respect to
the Company's common stock, in connection with the Company's
repurchase of their 2022 notes for cash. 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 and could
result in a higher effective conversion price for the notes.
In connection with any repurchase of the 2022 notes, the Company
has entered into agreements to terminate a corresponding portion of
the existing convertible note hedge and warrant transactions that
the Company entered into with certain financial institutions (the
"existing option counterparties") when the 2022 notes were issued.
In connection with any such termination and the related unwind of
the existing hedge position of the existing option counterparties
with respect to such transactions, the Company expects such
existing option counterparties and/or their respective affiliates
to sell shares of the Company's common stock in secondary market
transactions, and/or enter into or unwind various derivative
transactions with respect to the Company's common stock
concurrently with or shortly after the pricing of the notes.
Depending on when it occurs, the hedge unwind activity of the
existing option counterparties may to some extent offset the
effects of the hedge unwind activity of the holders of 2022 notes
described above.
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:
uncertainty regarding the duration and scope of the coronavirus
referred to as COVID-19 pandemic; actions governments and
businesses take in response to the pandemic, including actions that
could affect levels of advertising activity; the impact of the
pandemic and actions taken in response to the pandemic on national
and regional economies and economic activity; the pace of recovery
when the COVID-19 pandemic subsides; 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 consumers
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, 2019, the Company's Quarterly Report
on Form 10-Q for the period ended March 31,
2020 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 (NASDAQ: TREE) is the nation's leading online
marketplace that connects consumers with the choices they need to
be confident in their financial decisions. LendingTree empowers
consumers to shop for financial services the same way they would
shop for airline tickets or hotel stays, by comparing multiple
offers from a nationwide network of over 500 partners in one simple
search and choosing the option that best fits their financial
needs. Services include mortgage loans, mortgage refinances, auto
loans, personal loans, business loans, student refinances, credit
cards, insurance and more. Through the My LendingTree platform,
consumers receive free credit scores, credit monitoring and
recommendations to improve credit health. My LendingTree
proactively compares consumers' credit accounts against offers on
our network and notifies consumers when there is an opportunity to
save money. In short, LendingTree's purpose is to help simplify
financial decisions for life's meaningful moments through choice,
education and support.
LendingTree, Inc. is headquartered in Charlotte, NC.
Investor Relations Contact:
Trent Ziegler
trent.ziegler@lendingtree.com
704-943-8294
Media Contact:
Megan
Greuling
megan.greuling@lendingtree.com
704-943-8208
View original content to download
multimedia:http://www.prnewswire.com/news-releases/lendingtree-announces-pricing-of-500-0-million-of-convertible-senior-notes-due-2025--301097606.html
SOURCE LendingTree, Inc.