Wayfair Inc. (NYSE: W) (the “Company,” “we” or “Wayfair”)
announced today that it intends to offer, subject to market
conditions and other factors, $600 million aggregate principal
amount of convertible senior notes due 2027 (the “notes”) in a
private offering (the “offering”) to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”). In connection with the offering, the
Company expects to grant the initial purchasers an option to
purchase, within a 13-day period beginning on, and including, the
initial issuance date of the notes, up to an additional $90 million
aggregate principal amount of notes.
The final terms of the notes, including the initial conversion
rate, interest rate and certain other terms, will be determined at
the time of pricing. The Company expects that the reference price
used to calculate the initial conversion price for the notes will
be the last reported sale price of the Company’s Class A common
stock on Thursday, September 8, 2022. The notes will bear interest
semi-annually and will mature on September 15, 2027, unless earlier
redeemed, repurchased or converted in accordance with their terms.
Prior to June 15, 2027, the notes will be convertible only upon
satisfaction of certain conditions and during certain periods.
Thereafter, the notes will be convertible at any time until the
close of business on the second scheduled trading day immediately
preceding the maturity date. The Company may not redeem the notes
prior to September 20, 2025. On or after September 20, 2025, the
Company may redeem for cash all or part of the notes if the last
reported sale price of the Company’s Class A common stock has been
at least 130% of the conversion price then in effect for at least
20 trading days (whether or not consecutive), including at least
one of the five trading days immediately preceding the date on
which the Company provides notice of redemption, during any 30
consecutive trading day period ending on, and including, the
trading day immediately preceding the date on which the Company
provides notice of redemption. The redemption price will equal 100%
of the principal amount of the notes being redeemed, plus accrued
and unpaid interest to, but excluding, the redemption date.
The notes will be convertible at the option of holders, subject
to certain conditions and during certain periods, into cash, shares
of the Company’s Class A common stock or a combination of cash and
shares of the Company’s Class A common stock, with the form of
consideration determined at the Company’s election. Holders of the
notes will have the right to require the Company to repurchase all
or a portion of their notes at 100% of their principal amount, plus
any accrued and unpaid interest, upon the occurrence of certain
events.
When issued, the notes will be the Company’s senior unsecured
obligations and will rank senior in right of payment to any of the
Company’s unsecured indebtedness that is expressly subordinated in
right of payment to the notes; equal in right of payment to any of
the Company’s existing and future unsecured indebtedness that is
not so subordinated, such as its 0.375% convertible senior notes
due 2022, 1.125% convertible senior notes due 2024 (the “2024
Notes”), 0.625% convertible senior notes due 2025 (the “2025
Notes”), 2.50% accreting convertible senior notes due 2025 (the
“Accreting 2025 Notes”) and 1.00% convertible senior notes due
2026; effectively junior in right of payment to any of the
Company’s secured indebtedness to the extent of the value of the
assets securing such indebtedness; and structurally junior to all
existing and future indebtedness and other liabilities (including
trade payables) of the Company’s subsidiaries, including Wayfair
LLC’s guarantee of the Accreting 2025 Notes.
In connection with the pricing of the notes, the Company expects
to enter into privately negotiated capped call transactions with
one or more of the initial purchasers and/or their respective
affiliates and/or certain other financial institutions (the “option
counterparties”). These capped call transactions are generally
expected to reduce the potential dilution with respect to the
Company’s Class A 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,
with such reduction of potential dilution and/or offset of cash
payments subject to a cap.
The Company has been advised that, in connection with
establishing their initial hedges of the capped call transactions,
the option counterparties or their respective affiliates expect to
purchase shares of the Company’s Class A common stock and/or enter
into various derivative transactions with respect to the Company’s
Class A 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 Class A
common stock or the notes at that time. In addition, the Company
expects that the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Company’s Class A
common stock and/or purchasing or selling the Company’s Class A
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 on each trading day
during the observation period relating to any conversion of the
notes on or after June 15, 2027 that is not in connection with a
redemption, or following the Company’s election to terminate any
portion of the capped call transactions in connection with any
repurchase, redemption, exchange or early conversion of the notes).
This activity could also cause or avoid an increase or a decrease
in the market price of the Company’s Class A common stock or the
notes, which could affect the ability of holders 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 of the Company’s Class A common stock and value of
the consideration that holders will receive upon conversion of the
notes.
In addition, if any such capped call transaction fails to become
effective, whether or not the offering is completed, the option
counterparty party thereto may unwind its hedge positions with
respect to the Company’s Class A common stock, which could
adversely affect the value of the Company’s Class A common stock
and, if the notes have been issued, the value of the notes.
The Company intends to use a portion of the net proceeds from
the offering to pay the cost of the capped call transactions. If
the initial purchasers exercise their option to purchase additional
notes, the Company expects to use a portion of the net proceeds
from the sale of the additional notes to enter into additional
capped call transactions. In addition, the Company also intends to
use a portion of the net proceeds from the offering and, if
necessary, cash on hand, to repurchase for cash a portion of the
2024 Notes and 2025 Notes as described below. The Company intends
to use the remaining net proceeds, if any, from the offering for
working capital and general corporate purposes, including, but not
limited to, operating and capital expenditures. The Company may
also use a portion of such net proceeds to finance acquisitions,
strategic transactions, investments, repurchases of the Company’s
Class A common stock or the repayment, redemption, purchase or
exchange of indebtedness (including its existing convertible
notes).
Contemporaneously with the pricing of the notes in the offering,
the Company expects to enter into separate and individually
negotiated transactions (the “concurrent note repurchases”) with
certain holders of the 2024 Notes and certain holders of the 2025
Notes to repurchase for cash a portion of the 2024 Notes and 2025
Notes. The terms of the concurrent note repurchases are anticipated
to be individually negotiated with each holder of 2024 Notes and
the 2025 Notes, respectively, and will depend on several factors,
including the market price of the Company’s Class A common stock
and the trading price of the 2024 Notes and the 2025 Notes,
respectively, at the time of each such concurrent note repurchase.
No assurance can be given as to how much, if any, of the 2024 Notes
or 2025 Notes will be repurchased or the terms on which they will
be repurchased.
The Company expects that certain holders of the 2024 Notes and
certain holders of the 2025 Notes that the Company agrees to
repurchase that have hedged their equity price risk with respect to
such 2024 Notes and 2025 Notes, respectively (the “hedged
holders”), will, concurrently with or shortly after the pricing of
the new notes, unwind all or part of their hedge positions by
buying the Company’s Class A common stock and/or entering into or
unwinding various derivative transactions with respect to the
Company’s Class A common stock. Any repurchase of the 2024 Notes
and the 2025 Notes and the potential related market activities by
holders of the 2024 Notes and 2025 Notes participating in the
concurrent note repurchases could increase (or reduce the size of
any decrease in) the market price of the Company’s Class A common
stock, which may affect the trading price of the notes at that time
and the initial conversion price of the notes. The Company cannot
predict the magnitude of such market activity or the overall effect
it will have on the price of the notes or the Company’s Class A
common stock.
The notes and the Class A common stock issuable upon conversion
of the notes, if any, are not being registered under the Securities
Act, or the securities laws of any other jurisdiction. The notes
and the Class A common stock issuable upon conversion of the notes,
if any, may not be offered or sold in the United States except in
transactions exempt from, or not subject to, the registration
requirements of the Securities Act and any applicable state
securities laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
About Wayfair
Wayfair is the destination for all things home: helping
everyone, anywhere create their feeling of home. From expert
customer service, to the development of tools that make the
shopping process easier, to carrying one of the widest and deepest
selections of items for every space, style, and budget, Wayfair
gives everyone the power to create spaces that are just right for
them.
The Wayfair family of brands includes:
- Wayfair- Everything home — for a space that’s all you.
- Joss & Main - The ultimate style edit for home.
- AllModern - All of modern, made simple.
- Birch Lane - A fresh take on the classics.
- Perigold - An undiscovered world of luxury design.
- Wayfair Professional - Just right for Pros.
Wayfair generated $12.6 billion in net revenue for the twelve
months ended June 30, 2022. Headquartered in Boston, Massachusetts
with operations throughout North America and Europe, Wayfair
employs approximately 18,000 people.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal and state securities laws. All statements
other than statements of historical fact contained in this press
release, including, but not limited to, statements regarding:
whether we will offer and issue the notes and the terms of the
notes; the anticipated use of the net proceeds of the offering;
expectations regarding the effect of the capped call transactions
and the repurchase of the 2024 Notes and the 2025 Notes;
expectations regarding actions of the option counterparties and
their respective affiliates and regarding the hedged holders;
whether the capped call transactions will become effective; and
whether any repurchase of the 2024 Notes or the 2025 Notes will
close, are forward-looking statements. In some cases, you can
identify forward-looking statements by terms such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“target,” “projects,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential” or “continue” or the negative of these
terms or other similar expressions.
Forward-looking statements are based on current expectations of
future events. We cannot guarantee that any forward-looking
statement will be accurate, although we believe that we have been
reasonable in our expectations and assumptions. Investors should
realize that if underlying assumptions prove inaccurate or that
known or unknown risks or uncertainties materialize, actual results
could vary materially from our expectations and projections.
Investors are therefore cautioned not to place undue reliance on
any forward-looking statements. These forward-looking statements
speak only as of the date of this press release and, except as
required by applicable law, we undertake no obligation to publicly
update or revise any forward-looking statements contained herein,
whether as a result of any new information, future events or
otherwise.
A list and description of risks, uncertainties and other factors
that could cause or contribute to differences in our results can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K and subsequent
filings. We qualify all of our forward-looking statements by these
cautionary statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20220907006219/en/
Media Relations: Jane Carpenter, 617-502-7595
PR@wayfair.com
Investor Relations: Wayfair Inc. Jane Gelfand
IR@wayfair.com
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