PITTSBURGH, April 14, 2020 /PRNewswire/ -- DICK'S Sporting
Goods, Inc. (NYSE: DKS), a leading omni-channel sporting goods
retailer, today announced its intention to offer, subject to market
and other conditions, $500 million
aggregate principal amount of convertible senior notes due 2025
(the "notes") in a private offering only to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act"). DICK'S also intends to grant the initial purchasers of the
notes an option to purchase, for settlement within a period of 13
days from, and including, the date notes are first issued, up to an
additional $75 million aggregate
principal amount of notes in the private placement.
The notes will be unsecured, unsubordinated obligations of
DICK'S, will accrue interest payable semi-annually in arrears and
will mature on April 15, 2025, unless
earlier repurchased, redeemed or converted. Noteholders will have
the right to convert their notes in certain circumstances and
during specified periods. DICK'S will settle conversions by paying
or delivering, as applicable, cash, shares of its common stock or a
combination of cash and shares of its common stock, at DICK'S
election. The notes will also be redeemable, in whole or in part,
for cash at DICK'S option at any time, and from time to time, on or
after April 17, 2023 in certain
circumstances. 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 interest rate, initial conversion rate and
other terms of the notes will be determined at the pricing of the
offering.
DICK'S intends to use a portion of the net proceeds from the
offering to fund the cost of entering into the convertible note
hedge transactions described below (after such cost is partially
offset by the proceeds from entering into the warrant transactions
described below) and the remainder of the net proceeds from the
offering for general corporate purposes. If the initial purchasers
exercise their option to purchase additional notes, then DICK'S
intends to use a portion of the additional net proceeds to fund the
cost of entering into additional convertible note hedge
transactions as described below (after such cost is partially
offset by the proceeds from entering into the additional warrant
transactions described below).
In connection with the pricing of the notes, DICK'S intends to
enter into one or more privately negotiated convertible note hedge
transactions with one or more of the initial purchasers or their
respective affiliates or other financial institutions (in this
capacity, the "hedge counterparties"). The convertible note hedge
transactions will cover, subject to customary anti-dilution
adjustments, the number of shares of DICK'S common stock that will
initially underlie the notes sold in the offering. DICK'S also
intends to enter into one or more separate, privately negotiated
warrant transactions with the hedge counterparties collectively
relating to the same number of shares of DICK'S common stock,
subject to customary anti-dilution adjustments, and for which
DICK'S will receive premiums to partially offset the cost of
entering into the hedge transactions. If the initial purchasers
exercise their option to purchase additional notes from DICK'S,
then DICK'S may enter into one or more additional convertible note
hedge transactions and one or more additional warrant transactions
with the hedge counterparties, which, if executed, will initially
cover, collectively, the number of shares of DICK'S common stock
that will initially underlie the additional notes DICK'S sells to
the initial purchasers.
The convertible note hedge transactions are intended to reduce
the potential dilution with respect to DICK'S common stock or
offset any potential cash payments DICK'S is required to make in
excess of the principal amount of converted notes, as the case may
be, upon any conversion of the notes. The warrant transactions
could have a dilutive effect with respect to DICK'S common stock to
the extent that the price per share of DICK'S common stock exceeds
the strike price of the warrants evidenced by the warrant
transactions. In connection with establishing their initial hedge
positions with respect to the convertible note hedge transactions
and the warrant transactions, DICK'S expects that the hedge
counterparties or their respective affiliates will enter into
various cash-settled over-the-counter derivative transactions with
respect to DICK'S common stock concurrently with, or shortly after,
or purchase shares of DICK'S common stock shortly after, the
pricing of the notes, and may unwind these cash-settled
over-the-counter derivative transactions and purchase shares of
DICK'S common stock in open market transactions shortly after the
pricing of the notes. These activities could increase, or prevent a
decline in, the market price of DICK'S common stock concurrently
with, or shortly after, the pricing of the notes.
In addition, DICK'S expects that the hedge counterparties or
their respective affiliates will modify their hedge positions with
respect to the convertible note hedge transactions and the warrant
transactions from time to time after the pricing of the notes, and
are likely to do so during any observation period, by purchasing or
selling shares of DICK'S common stock or the notes in privately
negotiated transactions or open market transactions or by entering
into or unwinding various over-the-counter derivative transactions
with respect to DICK'S common stock. Any of these activities could,
however, adversely affect the trading price of DICK'S common stock
and, consequently, the value of the consideration that noteholders
receive upon conversion of the notes, the trading price of the
notes or noteholders' ability to convert the notes.
The offer and sale of the notes and any shares of DICK'S common
stock issuable upon conversion of the notes have not been
registered under the Securities Act or any other applicable
securities laws. As a result, the notes and the shares of
DICK'S common stock, if any, issuable upon conversion of the notes
will be subject to restrictions on transferability and resale and
may not be offered, transferred or sold, except in compliance with
the registration requirements of the Securities Act or pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any other
applicable securities laws.
This press release does not and will not constitute an offer to
sell, or the solicitation of an offer to buy, the notes, any shares
of DICK'S common stock issuable upon conversion of the notes, or
any other securities, nor will there be any sale of the notes or
any such shares or other securities, in any state or other
jurisdiction in which such offer, sale or solicitation would be
unlawful. Any offer will be made only by means of a private
offering memorandum.
About DICK'S
Founded in 1948, DICK'S Sporting Goods,
Inc. is a leading omni-channel sporting goods retailer offering an
extensive assortment of authentic, high-quality sports equipment,
apparel, footwear and accessories. As of February 1, 2020, DICK'S operated 726 DICK'S
Sporting Goods locations across the
United States, serving and inspiring athletes and outdoor
enthusiasts to achieve their personal best through a blend of
dedicated teammates, in-store services and unique specialty
shop-in-shops dedicated to Team Sports, Athletic Apparel, Golf,
Lodge/Outdoor, Fitness and Footwear.
Headquartered in Pittsburgh,
Pennsylvania, DICK'S also owns and operates Golf Galaxy and
Field & Stream specialty stores, as well as GameChanger, a
youth sports mobile app for scheduling, communications and live
scorekeeping. DICK'S offers its products through a content-rich
eCommerce platform that is integrated with its store network and
provides customers with the convenience and expertise of a 24-hour
storefront.
Forward-Looking Statements
This press release includes
forward-looking statements concerning DICK'S expectations,
anticipations, intentions, beliefs or strategies regarding the
future, including statements regarding the offering of the notes,
the anticipated terms of the notes being offered, the completion,
timing and size of the proposed offering, the intended use of the
proceeds and the anticipated terms of, and the effects of entering
into, the bond hedge and warrant transactions. Forward-looking
statements represent DICK'S current expectations regarding future
events and are subject to known and unknown risks and uncertainties
that could cause actual results to differ materially from those
implied by the forward-looking statements and there can be no
assurance that future developments affecting DICK'S will be those
that it has anticipated. Among those risks and uncertainties are
market conditions, including market interest rates, the trading
price and volatility of DICK'S common stock and risks relating to
DICK'S business, including the anticipated impact to consumer
demand and supply chain due to the spread of the coronavirus
(COVID-19) and other risks described in periodic reports that
DICK'S files from time to time with the Securities and Exchange
Commission ("SEC"). DICK'S may not consummate the proposed offering
described in this press release and, if the proposed offering is
consummated, cannot provide any assurances regarding the final
terms of the offer or the notes or its ability to effectively apply
the net proceeds as described above.
For additional information on these and other factors that could
affect DICK'S actual results, see the risk factors set forth in
DICK'S filings with the SEC, including the most recent Annual
Report filed with the SEC on March 20,
2020 and the Current Report on Form 8-K filed with the SEC
on April 14, 2020. DICK'S
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. Forward-looking
statements included in this release are made as of the date of this
release.
Contact Information
Investor Relations:
Nate Gilch, Senior Director of
Investor Relations
DICK'S Sporting Goods, Inc.
(724) 273-3400 or investors@dcsg.com
Media Relations:
(724) 273-5552 or press@dcsg.com
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SOURCE DICK'S Sporting Goods, Inc.