The Kraft Heinz Company (“Kraft Heinz”) (Nasdaq: KHC) announced
today that its 100% owned subsidiary Kraft Heinz Foods Company (the
“Issuer”) is increasing the maximum combined aggregate purchase
price (the “Maximum Tender Amount”) of its outstanding 3.500%
senior notes due June 2022 (the “June 2022 Notes”), 3.500% senior
notes due July 2022 (the “July 2022 Notes”), 4.000% senior notes
due 2023 (the “2023 Notes”) and 4.875% second lien senior secured
notes due 2025 (the “2025 Notes” and, together with the June 2022
Notes, the July 2022 Notes and the 2023 Notes, the “Notes” and
each, a “Series” of Notes) to be purchased by the Issuer pursuant
to its previously announced offer to purchase for cash (the “Tender
Offer”) to $2.5 billion, excluding accrued and unpaid interest,
from the previously announced Maximum Tender Amount of
$1,000,000,000. Subject to the Maximum Tender Amount, the amount of
a Series of Notes that is purchased in the Tender Offer will be
based on the Acceptance Priority Levels set forth below.
The other terms of the Tender Offer remain unchanged. The Tender
Offer is being made on the terms and subject to the conditions set
forth in the offer to purchase dated September 11, 2019, as amended
by a supplement dated September 11, 2019 (together, the “Offer to
Purchase”).
Consummation of the Tender Offer and payment for the tendered
Notes is subject to the satisfaction or waiver of certain
conditions described in the Offer to Purchase, including the
completion by the Issuer of a private offering (the “Offering”) of
$1 billion aggregate principal amount of its 3.750% notes due 2030,
$500 million aggregate principal amount of its 4.625% notes due
2039 and $1.5 billion aggregate principal amount of its 4.875%
notes due 2049 that commenced and priced today, on terms and
subject to conditions reasonably satisfactory to Kraft Heinz, as
well as other customary conditions.
Kraft Heinz also issued a notice of conditional partial
redemption providing for the redemption of $500,000,000 aggregate
principal amount of the Issuer’s remaining outstanding 2.800%
senior notes due 2020, at a redemption price of 100%, plus the
applicable redemption premium and accrued and unpaid interest, if
any, to, but not including, October 11, 2019, the expected
redemption date (the “Redemption”). The Redemption is also
conditioned upon the Issuer’s completion of the Offering.
Subject to applicable law, the Issuer has reserved the absolute
right, in its sole discretion, to at any time (i) waive any and all
conditions to the Tender Offer, (ii) extend, terminate or withdraw
the Tender Offer, (iii) increase or waive the Maximum Tender
Amount, with or without extending the Withdrawal Deadline (as
defined in the Offer to Purchase) or (iv) otherwise amend the
Tender Offer in any respect.
The Tender Offer will expire at 11:59 p.m., New York City time,
on October 8, 2019, unless extended or earlier terminated as
described in the Offer to Purchase (such time and date, as they may
be extended, the “Expiration Time”). Holders of the Notes
(“Holders”) may withdraw their validly tendered Notes at any time
prior to 5:00 p.m., New York City time, on September 24, 2019,
unless extended. Holders are urged to read the Offer to Purchase
carefully before making any decision with respect to the Tender
Offer.
Certain information regarding the Notes and the Tender Offer is
set forth in the table below.
CUSIP No. / ISIN
Title of Security
Aggregate Principal Amount
Outstanding
Acceptance Priority
Level
Reference Treasury
Security
Bloomberg Reference
Page
Fixed Spread(1) (bps)
Early Tender
Premium(2)
50076QAZ9 / US50076QAZ90
(144A):
50076QAF3 / US50076QAF37
(Reg S):
U5009CAC4 / USU5009CAC48
3.500% Senior Notes due June
2022
$2,000,000,000
1
1.500% U.S. Treasury due
8/15/22
FIT1
+90
$30.00
50077LAJ5 / US50077LAJ52
(144A):
423074BA0 / US423074BA02
(Reg S):
U42314AF8 / USU42314AF82
3.500% Senior Notes due July
2022
$1,000,000,000
2
1.500% U.S. Treasury due
8/15/22
FIT1
+90
$30.00
50077L AS5 / US50077LAS51
4.000% Senior Notes due
2023
$1,600,000,000
3
1.250% U.S. Treasury due
8/31/24
FIT1
+115
$30.00
(144A):
423074AS2 / US423074AS29
(Reg S):
U42314AA9 / USU42314AA95
4.875% Second Lien Senior Secured
Notes due 2025
$1,200,000,000
4
1.375% U.S. Treasury due
2/15/20
FIT3
+75
$30.00
(1) Fixed Spread includes the Early Tender Premium. (2) Per
$1,000 principal amount of Notes validly tendered and accepted for
purchase (the “Early Tender Premium”).
Holders who validly tender and do not validly withdraw their
Notes at or prior to 5:00 p.m., New York City time, on September
24, 2019, unless extended with respect to any Series of Notes (such
date and time, as the same may be extended, the “Early Tender
Time”) or earlier terminated by the Issuer, will be eligible to
receive the applicable Total Tender Offer Consideration (as defined
in the Offer to Purchase), which includes the applicable Early
Tender Premium as set forth in the table above. The applicable
total consideration for each $1,000 principal amount of Notes
validly tendered and accepted for purchase will be determined in
the manner described in the Offer to Purchase by reference to the
applicable fixed spread over the bid-side yield of the applicable
reference security, calculated as of 10:00 a.m., New York City
time, on September 25, 2019. Holders of Notes who validly tender
and do not validly withdraw their Notes after the Early Tender Time
and at or prior to the Expiration Time will be eligible to receive
only the applicable Late Tender Offer Consideration, which is equal
to the applicable Total Tender Offer Consideration minus the
applicable Early Tender Premium.
For Notes tendered at or prior to the Early Tender Time, not
subsequently validly withdrawn and accepted for purchase, the
Issuer has the option for settlement to occur on the Early
Settlement Date (as defined in the Offer to Purchase), which is
expected to be September 26, 2019, the second business day
following the Early Tender Time. Settlement for Notes tendered
after the Early Tender Time, but at or prior to the Expiration
Time, is expected to occur on October 9, 2019, the business day
following the Expiration Time, unless extended.
In addition, all Notes accepted for purchase will be entitled to
receipt of accrued and unpaid interest in respect of such Notes
from the last interest payment date to, but excluding, the
applicable settlement date.
Subject to the Maximum Tender Amount, the application of the
Acceptance Priority Levels and the other terms and conditions
described in the Offer to Purchase, the Issuer intends to accept
for purchase all Notes validly tendered and not validly withdrawn
at or prior to the Early Tender Time. However, if the Tender Offer
is fully subscribed as of the Early Tender Time, Holders who
validly tender their Notes after the Early Tender Time will not
have any of their Notes accepted for purchase. Notes validly
tendered at or prior to the Early Tender Time will be accepted for
purchase in priority to the other Notes tendered after the Early
Tender Time even if such Notes tendered after the Early Tender Time
have a higher Acceptance Priority Level than the Notes tendered at
or prior to the Early Tender Time. As a result, each Holder who
validly tenders Notes pursuant to the Tender Offer may have a
portion of its Notes returned to it, and the amount of Notes
returned will depend on the level of participation of Holders in
the Tender Offer. The Tender Offer may be subject to proration if
the aggregate principal amount of Notes that is validly tendered is
greater than the Maximum Tender Amount.
Kraft Heinz has engaged BofA Merrill Lynch, Citigroup, Goldman
Sachs & Co. LLC, and J.P. Morgan to act as dealer managers
(collectively, the “Dealer Managers”) in connection with the Tender
Offer and has appointed Global Bondholders Services Corporation to
serve as the tender agent and information agent for the Tender
Offer. Copies of the Offer to Purchase are available at
https://www.gbsc-usa.com/kraftheinzcompany/ or by contacting Global
Bondholders Services Corporation via telephone by calling +1 (866)
794-2200 (toll free) or +1 212-430-3774 (for banks and brokers).
Questions regarding the terms of the Tender Offer should be
directed to BofA Merrill Lynch at (980) 387-3907 (toll free) or
(888) 292-0070 (collect), Citigroup at (800) 558-3745 (toll free)
or (212) 723-6106 (collect), Goldman Sachs & Co. LLC at (800)
828-3182 (toll free) or (212) 357-0215 (collect) or J.P. Morgan at
(866) 834-4666 (toll free) or (212) 834-8553 (collect).
Neither the Issuer, Kraft Heinz, their boards of directors or
boards of managers, as applicable, the Dealer Managers, Global
Bondholders Services Corporation nor the trustees for the Notes, or
any of their respective affiliates, is making any recommendation as
to whether Holders should tender any Notes in response to the
Tender Offer. Holders must make their own decision as to whether to
tender any of their Notes and, if so, the principal amounts of
Notes to tender.
This press release is for informational purposes only and is not
an offer to purchase, a solicitation of an offer to purchase or a
solicitation of consents with respect to any securities. This press
release does not describe all the material terms of the Tender
Offer, and no decision should be made by any Holder on the basis of
this press release. The terms and conditions of the Tender Offer
are described in the Offer to Purchase, and this press release must
be read in conjunction with the Offer to Purchase. Except as
described in this press release, the terms and conditions of the
Tender Offer as described in the Offer to Purchase are unchanged.
The Offer to Purchase contains important information which should
be read carefully before any decision is made with respect to the
Tender Offer. If any Holder is in any doubt as to the contents of
this press release, or the Offer to Purchase, or the action it
should take, it is recommended to seek its own financial and legal
advice, including in respect of any tax consequences, immediately
from its stockbroker, bank manager, solicitor, accountant or other
independent financial, tax or legal adviser. Any individual or
company whose Notes are held on its behalf by a broker, dealer,
bank, custodian, trust company or other nominee must contact such
entity if it wishes to tender such Notes pursuant to the Tender
Offer.
ABOUT THE KRAFT HEINZ COMPANY
For 150 years, we have produced some of the world’s most beloved
products at The Kraft Heinz Company (Nasdaq: KHC). Our Vision is To
Be the Best Food Company, Growing a Better World. We are one of the
largest global food and beverage companies, with 2018 net sales of
approximately $26 billion. Our portfolio is a diverse mix of iconic
and emerging brands. As the guardians of these brands and the
creators of innovative new products, we are dedicated to the
sustainable health of our people and our planet. To learn more,
visit www.kraftheinzcompany.com or follow us on LinkedIn and
Twitter.
FORWARD-LOOKING STATEMENTS
This press release contains a number of forward-looking
statements. Words such as “anticipate,” “reflect,” “invest,” “see,”
“make,” “expect,” “give,” “deliver,” “drive,” “believe,” “improve,”
“assess,” “reassess,” “remain,” “evaluate,” “grow,” “will,” “plan,”
“intend” and variations of such words and similar future or
conditional expressions are intended to identify forward-looking
statements. Examples of forward-looking statements include, but are
not limited to, statements regarding Kraft Heinz’s plans and
expected timing and benefits of the transaction, and the Late
Tender Offer Consideration or Total Tender Offer Consideration, as
applicable, to be paid to holders of the Notes who tender their
Notes at or prior to the Early Tender Time or the Expiration Time.
These forward-looking statements are not guarantees of future
performance and are subject to a number of risks and uncertainties,
many of which are difficult to predict and beyond Kraft Heinz’s
control.
Important factors that may affect Kraft Heinz’s business and
operations and that may cause actual results to differ materially
from those in the forward-looking statements include, but are not
limited to, the completion of the Tender Offer; operating in a
highly competitive industry; Kraft Heinz’s ability to correctly
predict, identify, and interpret changes in consumer preferences
and demand, to offer new products to meet those changes, and to
respond to competitive innovation; changes in the retail landscape
or the loss of key retail customers; changes in Kraft Heinz’s
relationships with significant customers, suppliers and other
business relationships; Kraft Heinz’s ability to maintain, extend,
and expand Kraft Heinz’s reputation and brand image; Kraft Heinz’s
ability to leverage Kraft Heinz’s brand value to compete against
private label products; Kraft Heinz’s ability to drive revenue
growth in its key product categories, increase Kraft Heinz’s market
share, or add products that are in faster-growing and more
profitable categories; product recalls or product liability claims;
unanticipated business disruptions; Kraft Heinz’s ability to
identify, complete, or realize the benefits from strategic
acquisitions, alliances, divestitures, joint ventures, or other
investments; Kraft Heinz’s ability to realize the anticipated
benefits from prior or future streamlining actions to reduce fixed
costs, simplify or improve processes, and improve Kraft Heinz’s
competitiveness; Kraft Heinz’s ability to successfully execute
Kraft Heinz’s strategic initiatives; the impacts of Kraft Heinz’s
international operations; economic and political conditions in the
United States and in various other nations where Kraft Heinz does
business; changes in Kraft Heinz’s management team or other key
personnel and Kraft Heinz’s ability to hire or retain key personnel
or a highly skilled and diverse global workforce; risks associated
with information technology and systems, including service
interruptions, misappropriation of data, or breaches of security;
impacts of natural events in the locations in which Kraft Heinz or
Kraft Heinz’s customers, suppliers, distributors, or regulators
operate; Kraft Heinz’s ownership structure; Kraft Heinz’s
indebtedness and ability to pay such indebtedness; additional
impairments of the carrying amounts of goodwill or other
indefinite-lived intangible assets; exchange rate fluctuations;
volatility in commodity, energy, and other input costs; volatility
in the market value of all or a portion of the derivatives Kraft
Heinz uses; increased pension, labor and people-related expenses;
compliance with laws, regulations, and related interpretations and
related legal claims or other regulatory enforcement actions,
including additional risks and uncertainties related to Kraft
Heinz’s restatement and any potential actions resulting from the
Securities and Exchange Commission’s (the “SEC”) ongoing
investigation, as well as potential additional subpoenas,
litigation and regulatory proceedings; an inability to remediate
the material weaknesses in Kraft Heinz’s internal control over
financial reporting or additional material weaknesses or other
deficiencies in the future or the failure to maintain an effective
system of internal controls; Kraft Heinz’s failure to prepare and
timely file its periodic reports; the restatement of certain of
Kraft Heinz’s previously issued consolidated financial statements,
which resulted in unanticipated costs and may affect investor
confidence and raise reputational issues; Kraft Heinz’s ability to
protect intellectual property rights; tax law changes or
interpretations; the impact of future sales of Kraft Heinz's common
stock in the public markets; Kraft Heinz’s ability to continue to
pay a regular dividend and the amounts of any such dividends; and
the volatility of capital markets and other macroeconomic factors
and other factors. For additional information on these and other
factors that could affect Kraft Heinz’s forward-looking statements,
see Kraft Heinz’s risk factors, as they may be amended from time to
time, set forth in its filings with the SEC. Kraft Heinz 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190911005831/en/
Michael Mullen (media) Head of Corporate Affairs The Kraft Heinz
Company Michael.Mullen@kraftheinz.com
Christopher Jakubik, CFA (investors) Head of Global Investor
Relations The Kraft Heinz Company ir@kraftheinz.com
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