Bloomin’ Brands, Inc. (Nasdaq: BLMN) today announced the pricing
on May 5, 2020 of its offering of $200 million aggregate principal
amount of 5.00% convertible senior notes due 2025 (the “notes”) in
a private offering only to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). Bloomin’ Brands also granted 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 $30 million aggregate principal
amount of notes in the private placement. The issuance and sale of
the notes is scheduled to settle on or about May 8, 2020, subject
to customary closing conditions.
The notes will be senior, unsecured obligations of Bloomin’
Brands and will accrue interest at a rate of 5.00% per annum,
payable semi-annually in arrears on May 1 and November 1 of each
year, beginning on November 1, 2020. The notes will mature on May
1, 2025, unless earlier repurchased, redeemed or converted. The
notes will be convertible by the noteholders prior to the close of
business on the business day immediately preceding November 1, 2024
only under certain circumstances and during certain periods, and
irrespective of those circumstances, will be convertible by the
noteholders on or after November 1, 2024 until the close of
business on the second scheduled trading day immediately preceding
May 1, 2025. The initial conversion rate will be 84.1220 shares of
Bloomin’ Brands’ common stock per $1,000 principal amount of notes
(equivalent to an initial conversion price of approximately $11.89
per share of Bloomin’ Brands’ common stock, which represents a
premium of approximately 25% over the last reported sale price of
$9.51 per share of Bloomin’ Brands’ common stock on May 5, 2020),
subject to adjustment in certain circumstances. Upon conversion,
the notes may be settled, at Bloomin’ Brands’ election, in cash,
shares of Bloomin’ Brands’ common stock or a combination of cash
and shares of Bloomin’ Brands’ common stock.
The notes will also be redeemable, in whole or in part, for cash
at Bloomin’ Brands’ option at any time, and from time to time, on
or after May 1, 2023 in certain circumstances at a redemption price
equal to the principal amount of the notes to be redeemed, plus
accrued and unpaid interest, if any, to, but excluding, the
redemption date. In addition, in certain limited circumstances,
noteholders may require Bloomin’ Brands to repurchase their notes
for cash for a repurchase price equal to the principal amount of
the notes to be repurchased, plus accrued and unpaid interest, if
any, to, but excluding, the applicable repurchase date.
In connection with the pricing of the notes, Bloomin’ Brands
entered into privately-negotiated convertible note hedge
transactions with one or more of the initial purchasers and/or
their respective affiliates and/or other financial institutions
(the "option counterparties"). These transactions cover, subject to
customary anti-dilution adjustments, the number of shares of
Bloomin’ Brands’ common stock that will initially underlie the
notes, and are expected generally to reduce the potential equity
dilution, and/or offset any cash payments in excess of the
principal amount due, as the case may be, upon conversion of the
notes. Bloomin’ Brands entered into separate, privately-negotiated
warrant transactions with the option counterparties at a higher
strike price relating to the same number of shares of Bloomin’
Brands’ common stock, subject to customary anti-dilution
adjustments, pursuant to which Bloomin’ Brands will sell warrants
to the option counterparties. The warrants could have a dilutive
effect on Bloomin’ Brands’ outstanding common stock to the extent
that the price of Bloomin’ Brands’ common stock exceeds the strike
price of those warrants. The strike price of the warrants will
initially be $16.64 per share, which represents a premium of
approximately 75% over the last reported sale price of Bloomin’
Brands’ common stock on May 5, 2020 and is subject to certain
adjustments under the terms of the warrant transactions.
If the initial purchasers exercise their option to purchase
additional notes, Bloomin’ Brands expects to enter into additional
convertible note hedge transactions and additional warrant
transactions with the option counterparties, which will initially
cover the number of shares of Bloomin’ Brands’ common stock that
will initially underlie the additional notes sold to the initial
purchasers.
Bloomin’ Brands has been advised that in connection with
establishing their initial hedges of the convertible note hedge and
warrant transactions, the option counterparties or their respective
affiliates expect to enter into various derivative transactions
with respect to Bloomin’ Brands’ 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 Bloomin’ Brands’ common stock or the notes at that time. The
option counterparties or their respective affiliates may modify
their hedge positions by entering into or unwinding various
derivatives with respect to Bloomin’ Brands’ common stock and/or
purchasing or selling Bloomin’ Brands’ common stock or other
securities of Bloomin’ Brands in secondary market transactions from
time to time following the pricing of the notes and prior to
maturity of the notes (and are likely to do so during any
observation period related to a conversion of the notes).
The potential effect, if any, of these transactions and
activities on the market price of Bloomin’ Brands’ common stock or
the notes will depend in part on market conditions and cannot be
ascertained at this time, but any of these activities could
adversely affect the value of Bloomin’ Brands’ common stock, which
could affect the ability to convert the notes, the value of the
notes and the amount of cash, if any, and the number of and value
of the shares of Bloomin’ Brands’ common stock, if any, holders
would receive upon conversion of the notes.
Bloomin’ Brands estimates that the net proceeds from the
offering will be approximately $192.3 million (or approximately
$221.4 million if the initial purchasers fully exercise their
option to purchase additional notes), after deducting the initial
purchasers’ discounts and commissions and estimated offering
expenses. Bloomin’ Brands intends to use a portion of the net
proceeds of this offering to pay the cost of the convertible note
hedge transactions (after such cost is partially offset by the
proceeds to Bloomin’ Brands from the sale of the warrants) and
intends to use the remainder of the net proceeds from the offering
for general corporate purposes.
The offer and sale of the notes and any shares of Bloomin’
Brands’ 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 Bloomin’
Brands’ 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 Bloomin’ Brands’ 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 Bloomin’ Brands, Inc.
Bloomin’ Brands, Inc. is one of the largest casual dining
restaurant companies in the world with a portfolio of leading,
differentiated restaurant concepts. Bloomin’ Brands has four
founder-inspired brands: Outback Steakhouse, Carrabba’s Italian
Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine
Bar. Bloomin’ Brands operates more than 1,450 restaurants in 48
states, Puerto Rico, Guam and 20 countries, some of which are
franchise locations.
Forward-Looking Statements
This press release includes forward-looking statements
concerning Bloomin’ Brands 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 net proceeds and the
anticipated terms of, and the effects of entering into, the
convertible note hedge and warrant transactions. Generally, these
statements can be identified by the use of words such as
“believes,” “estimates,” “anticipates,” “expects,” “on track,”
“feels,” “forecasts,” “seeks,” “projects,” “intends,” “plans,”
“may,” “will,” “should,” “could,” “would” and similar expressions
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
Forward-looking statements represent Bloomin’ Brands 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 Bloomin’ Brands will be those that it has anticipated.
These risks and uncertainties include, but are not limited to,
market conditions and the satisfaction of closing conditions
relating to the offering, and risks relating to Bloomin’ Brands’
business, including: the effects of the COVID-19 pandemic and
uncertainties about its depth and duration, as well as the impacts
to economic conditions and consumer behavior, including, among
others: the inability of workers, including delivery drivers, to
work due to illness, quarantine, or government mandates, temporary
restaurant closures due to reduced workforces or government
mandates, the unemployment rate, the extent, availability and
effectiveness of any COVID-19 stimulus packages or loan programs,
the ability of our franchisees to operate their restaurants during
the pandemic and pay royalties, trends in consumer behavior and
spending during and after the end of the pandemic, and the
Company’s ability to manage expenses and generate sufficient cash
flow to fund operations; our ability to achieve any cost savings
targeted through our strategic review; consumer reaction to public
health and food safety issues; competition; increases in labor
costs; government actions and policies; increases in unemployment
rates and taxes; local, regional, national and international
economic conditions; consumer confidence and spending patterns;
price and availability of commodities; the effects of changes in
tax laws; challenges associated with our remodeling, relocation and
expansion plans; interruption or breach of our systems or loss of
consumer or employee information; political, social and legal
conditions in international markets and their effects on foreign
operations and foreign currency exchange rates; our ability to
preserve the value of and grow our brands; the seasonality of the
Bloomin’ Brands’ business; weather, acts of God and other
disasters; changes in patterns of consumer traffic, consumer tastes
and dietary habits; the cost and availability of credit; interest
rate changes; compliance with debt covenants and Bloomin’ Brands’
ability to make debt payments and planned investments; and other
risks described in periodic reports that Bloomin’ Brands files from
time to time with the Securities and Exchange Commission (“SEC”).
Bloomin’ Brands 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 Bloomin’ Brands actual results, see the risk factors set
forth in Bloomin’ Brands’ filings with the SEC, including the most
recent Annual Report on Form 10-K filed with the SEC on February
26, 2020 and the Current Report on Form 8-K filed with the SEC on
May 5, 2020. Bloomin’ Brands 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200506005319/en/
Mark Graff Group Vice President, IR & Finance (813) 830-5311
Investor@bloominbrands.com
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