Signet Jewelers Limited (NYSE: SIG) and Leonard Green & Partners, L.P. (LGP) have announced the repurchase of 50% of the Series A Convertible Preference Shares ("preferred shares") ahead of their scheduled maturity in November 2024. The repurchase, valued at approximately $414 million in cash, will immediately reduce Signet's diluted share count by approximately 7.6%. Following the transaction, $328 million will remain in the stated value of the preferred shares, carrying a 5.0% dividend.
The company also announced an amendment to the terms of the preferred shares to net share settlement, which will further reduce Signet's diluted share count by approximately 5%. This amendment provides flexibility for the remaining value to be delivered in cash, shares, or a combination of both at Signet's election. Evercore served as the exclusive financial advisor to Signet in connection with the preferred share repurchase and amendment.
As a result of the preferred shares repurchase transaction and amendment, Signet has increased its fiscal 2025 non-GAAP diluted earnings per share (EPS) guidance by 9% to 10%. The revised outlook now stands at a range of $9.90 to $11.52 per diluted share, up from the previous range of $9.08 to $10.48 per diluted share. This increase reflects the diluted share impact of the repurchase and amendment, with a weighted average diluted share count of approximately 46.3 million shares for fiscal 2025.
In addition, the updated non-GAAP diluted EPS range anticipates the allocation of up to $1.1 billion to retire outstanding debt, preferred shares, and repurchase common shares during fiscal 2025. It excludes potential non-recurring charges, such as restructuring charges, asset impairments, or integration-related costs associated with the acquisition of Blue Nile.
Signet Jewelers Limited, the world's largest retailer of diamond jewelry, operates approximately 2,700 stores under various name brands. The company's strong financial performance and strategic decision to repurchase preferred shares have positively impacted its future earnings outlook and financial position. As a result of these announcements, the company's shares have moved 9.2% on the market, and are now trading at a price of $103.8. Check out the company's full 8-K submission here.
