Dick's Sporting Goods has announced the commencement of an exchange offer and consent solicitation for Foot Locker's senior notes due 2029. The exchange offer allows eligible holders to exchange any and all outstanding 4.000% senior notes due 2029 issued by Foot Locker for up to $400 million aggregate principal amount of new 4.000% senior notes due 2029 issued by Dick’s in principal amount as set forth in the table below and the consent payment.
The consent payment for the Foot Locker notes will range from $2.50 per $1,000 principal amount if all eligible holders tender, to approximately $5.00 per $1,000 principal amount if eligible holders tender a simple majority of the aggregate principal amount of the Foot Locker notes.
In addition, for each $1,000 principal amount of Foot Locker notes validly tendered and not validly withdrawn at or prior to the early participation date and accepted for exchange, the early participation premium will be paid. The total consideration for the Foot Locker notes will be $1,000 principal amount of Dick’s 4.000% senior notes due 2029 and the consent payment.
This initiative is being conducted in connection with the anticipated acquisition of Foot Locker, and is conditioned upon the closing of the merger of a subsidiary of Dick’s with and into Foot Locker, with Foot Locker surviving the merger as a wholly owned subsidiary of Dick’s. The proposed amendments to the indenture governing the Foot Locker notes include eliminating substantially all of the restrictive covenants, certain affirmative covenants, and certain events of default.
The table below provides a clear breakdown of the consent payment, exchange consideration, early participation premium, and total consideration for the Foot Locker notes:
- Consent payment: $2.50 to $5.00 per $1,000 principal amount of Foot Locker notes
- Exchange consideration: $970 principal amount of Dick’s 4.000% senior notes due 2029
- Early participation premium: $30.00 principal amount of Dick’s 4.000% senior notes due 2029
- Total consideration: $1,000 principal amount of Dick’s 4.000% senior notes due 2029 and the consent payment As a result of these announcements, the company's shares have moved 0.98% on the market, and are now trading at a price of $180.75. Check out the company's full 8-K submission here.
