Dick's Sporting Goods, Inc. has announced the commencement of an exchange offer and consent solicitation for Foot Locker, Inc.'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, along with the consent payment. This offer is being conducted in connection with Dick's anticipated acquisition of Foot Locker.
In conjunction with the exchange offer, Dick's is soliciting consents to adopt certain proposed amendments to the indenture governing the Foot Locker notes, which includes eliminating restrictive covenants, certain affirmative covenants, and certain events of default.
The specifics of the offer include a consent payment ranging from $2.50 to $5.00 per $1,000 principal amount of Foot Locker notes validly tendered and not validly withdrawn by the early participation date. The exchange consideration for each $1,000 principal amount of Foot Locker notes accepted for exchange is $970 principal amount of Dick’s 4.000% senior notes due 2029. Additionally, there is an early participation premium of $30.00 principal amount of Dick’s 4.000% senior notes due 2029 and the consent payment for each $1,000 principal amount of Foot Locker notes validly tendered and not validly withdrawn at or prior to the early participation date.
This announcement comes in the midst of Dick's Sporting Goods' efforts to acquire Foot Locker, Inc., and the details of the exchange offer and consent solicitation provide insight into the financial aspects of the anticipated acquisition. The market has reacted to these announcements by moving the company's shares 0.98% to a price of $180.75. For more information, read the company's full 8-K submission here.
