Zynga Inc. Announces Proposed Private Offering of $600 Million of Convertible Senior Notes
June 10 2019 - 4:05PM
Business Wire
Zynga Inc. (Nasdaq: ZNGA), a global leader in interactive
entertainment, today announced that it intends to offer, subject to
market conditions and other factors, $600
million aggregate principal amount of convertible senior notes
due 2024 (the “notes”) in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”). Zynga also intends to
grant the initial purchasers of the notes an option to purchase,
during a 13-day period beginning on, and including, the date on
which the notes are first issued, up to an additional $90
million aggregate principal amount of the notes.
The notes will be senior unsecured obligations of Zynga and will
accrue interest payable semiannually in arrears. The notes will be
convertible into cash, shares of Zynga’s Class A common stock
(“common stock”) or a combination of cash and shares of Zynga’s
common stock, at Zynga’s election. The interest rate, initial
conversion rate and other terms of the notes will be determined at
the time of pricing of the offering.
Zynga intends to use a portion of the net proceeds from the
offering to pay the cost of the capped call transactions described
below. Zynga intends to use the remainder of the net proceeds for
working capital and other general corporate purposes, which may
include capital expenditures, the repayment of debt, and potential
acquisitions and future transactions. However, it has not
designated any specific uses and has no current agreements with
respect to any material acquisition or strategic transaction.
In connection with the pricing of the notes, Zynga expects to
enter into capped call transactions with one or more of the initial
purchasers and/or their respective affiliates and/or other
financial institutions (the “option counterparties”). The capped
call transactions are expected generally to reduce potential
dilution to Zynga’s common stock upon any conversion of notes
and/or offset any cash payments Zynga 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 exercise their option to purchase additional notes,
Zynga expects to enter into additional capped call transactions
with the option counterparties.
Zynga expects that, in connection with establishing their
initial hedges of the capped call transactions, the option
counterparties or their respective affiliates may enter into
various derivative transactions with respect to Zynga’s common
stock and/or purchase shares of Zynga’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 Zynga’s common stock or the notes at that time.
In addition, Zynga expects that the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
Zynga’s common stock and/or purchasing or selling Zynga’s common
stock or other securities of Zynga 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 prevent an increase or a decrease in the market price of Zynga’s
common stock or the notes, and to the extent the activity occurs
during any observation period related to a conversion of notes,
this could affect the value of the consideration that a noteholder
will receive upon conversion of its notes.
Neither the notes, nor any shares of Zynga’s common stock
potentially issuable upon conversion of the notes, have been, nor
will be, registered under the Securities Act or any state
securities laws and, unless so registered, such securities may not
be offered or sold in the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and other applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190610005724/en/
Investor Relations:Rebecca LauInvestors@zynga.com
Press:Sarah Rosssarah@zynga.com
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