LOS
ANGELES, Jan. 9, 2023 /PRNewswire/ -- Live Nation
Entertainment, Inc. (NYSE: LYV) (the "company") today announced
that it priced its previously announced offering of $900.0 million in aggregate principal amount of
its 3.125% convertible senior notes due 2029 (the "Convertible
Notes"). The offering size was increased from the previously
announced offering size of $850.0
million aggregate principal amount of Convertible Notes. The
Convertible Notes were priced at 100.000% of their principal
amount. The company intends to use a portion of the net proceeds
from the Convertible Notes offering to fund the cost of entering
into the capped call transactions described below. The company
intends to use the remainder of the net proceeds from the
Convertible Notes offering to effect the repurchase of a portion of
its 2.5% convertible senior notes due 2023 (the "existing
convertible notes"), to pay related fees and expenses and for
general corporate purposes, which may include the repayment or
repurchase of certain of its outstanding indebtedness.
The Convertible Notes will have an initial conversion rate of
9.2259 shares of the company's common stock per $1,000 principal amount of the Convertible Notes
(equivalent to an initial conversion price of approximately
$108.39 per share of the company's
common stock). The initial conversion price represents a premium of
50.0% to the $72.26 per share closing
price of the company's common stock on The New York Stock Exchange
on January 9, 2023.
In connection with the Convertible Notes offering, the company
granted the initial purchasers the right to purchase, for
settlement within a 13-day period beginning on, and including, the
date the Convertible Notes are first issued, up to an additional
$100.0 million aggregate principal
amount of Convertible Notes. If the initial purchasers exercise
their option to purchase additional Convertible Notes, then the
company intends to use a portion of the additional net proceeds to
fund the cost of entering into additional capped call transactions
as described below.
The initial closing date of the Convertible Notes offering is
expected to occur on January 12,
2023.
The Convertible Notes will accrue interest at a rate of 3.125%
per annum, payable semi-annually in arrears on January 15 and July
15 of each year, beginning on July
15, 2023. The Convertible Notes will mature on January 15, 2029, unless repurchased, redeemed or
converted in accordance with their terms prior to such date. Prior
to the close of business on the business day immediately preceding
October 15, 2028, the Convertible
Notes will be convertible only upon satisfaction of certain
conditions and during certain periods; thereafter, the Convertible
Notes will be convertible at any time until the close of business
on the second scheduled trading day immediately preceding the
maturity date. Upon conversion, holders of the Convertible Notes
will receive shares of the company's common stock, cash or a
combination thereof, at the company's election. Holders of the
Convertible Notes will have the right to require the company to
repurchase all or a portion of their Convertible Notes at 100% of
their principal, plus any accrued and unpaid interest, upon the
occurrence of certain corporate events constituting a "fundamental
change" as defined in the indenture for the Convertible Notes. The
company may not redeem the Convertible Notes prior to January 21, 2026. The company may redeem for cash
all or any portion of the Convertible Notes, at its option, on a
redemption date occurring on or after January 21, 2026 and before the 41st scheduled
trading day before the maturity date, but only if the last reported
sale price of the company's common stock has been at least 130% of
the conversion price then in effect for a specified period of time.
The redemption price will equal 100% of the principal amount of the
Convertible Notes to be redeemed, plus any accrued and unpaid
interest to, but excluding, the redemption date.
In connection with the pricing of the Convertible Notes, the
company entered into privately negotiated capped call transactions
with one or more of the initial purchasers or their affiliates
and/or other financial institutions (the "option counterparties").
The capped call transactions will initially cover, subject to
anti-dilution adjustments substantially similar to those applicable
to the Convertible Notes, the number of shares of the company's
common stock underlying the Convertible Notes. If the initial
purchasers exercise their option to purchase additional Convertible
Notes, the company expects to enter into additional capped call
transactions with the option counterparties.
The cap price of the capped call transactions will initially be
$144.52 per share, which represents a
premium of 100% over the last reported sale price of the company's
common stock of $72.26 per share on
The New York Stock Exchange on January 9,
2023, and is subject to certain adjustments under the terms
of the capped call transactions.
The capped call transactions are expected generally to reduce
the potential dilution to the company's common stock upon any
conversion of the Convertible Notes and/or offset any
potential cash payments the company is required to make in excess
of the principal amount of converted notes, as the case may be. If,
however, the market price per share of the company's common stock,
as measured under the terms of the capped call transactions,
exceeds the cap price of the capped call transactions, there would
nevertheless be dilution and/or there would not be an offset of
such potential cash payments, in each case, to the extent that such
market price exceeds the cap price of the capped call
transactions.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to the company's common stock and/or
purchase shares of the company's common stock concurrently with or
shortly after the pricing of the Convertible Notes. This activity
could increase (or reduce the size of any decrease in) the market
price of the company's common stock or the Convertible
Notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the company's common
stock and/or purchasing or selling shares of the company's common
stock or other securities of the company in secondary market
transactions following the pricing of the Convertible
Notes and prior to the maturity of the Convertible Notes (and
(x) are likely to do so during any conversion reference period
related to a conversion of the Convertible Notes or following any
repurchase of the Convertible Notes by the company in connection
with any fundamental change and (y) are likely to do so following
any repurchase of the Convertible Notes by the company other than
in connection with any fundamental change if the company elects to
unwind a corresponding portion of the capped call transactions in
connection with such repurchase). This activity could also cause or
avoid an increase or decrease in the market price of the company's
common stock or the Convertible Notes, which could affect the
holders' ability to convert the Convertible Notes and, to the
extent the activity occurs following conversion or during any
conversion reference period related to a conversion of the
Convertible Notes, it could affect the number of shares of the
company's common stock and value of the consideration that holders
will receive upon conversion of the Convertible Notes.
On January 9, 2023, the company
agreed to repurchase approximately $440.0
million in aggregate principal amount of the existing
convertible notes from a limited number of holders in privately
negotiated transactions for an aggregate purchase price of
approximately $489.3 million. The
company expects that holders of the existing convertible notes that
sell their existing convertible notes to the company in any note
repurchase transaction described above may enter into or unwind
various derivatives with respect to the company's common stock
and/or purchase or sell shares of the company's common stock in the
market to hedge their exposure in connection with these
transactions. In particular, the company expects that many holders
of the existing convertible notes employ a convertible arbitrage
strategy with respect to the existing convertible notes and have a
short position with respect to the company's common stock that they
would close, through purchases of the company's common stock and/or
the entry into or unwind of economically equivalent derivatives
transactions with respect to the company's common stock, in
connection with the company's repurchase of their existing
convertible notes. The repurchase of the company's existing
convertible notes, and the potential related market activities by
holders of the existing convertible notes participating in the
existing convertible notes repurchases, could increase (or reduce
the size of any decrease in) or decrease (or reduce the size of any
increase in) the market price of the company's common stock, which
may affect the trading price of the Convertible Notes at that time
and may have affected the initial conversion price of the
Convertible Notes. The company cannot predict the magnitude of such
market activity or the overall effect it will have on the price of
the Convertible Notes or its common stock, or estimate the effect
such market activity may have had on the initial conversion price
of the Convertible Notes.
The Convertible Notes will be offered through a private
placement and will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), or any state securities
laws. As a result, the Convertible Notes and any common stock
issuable upon conversion of the Convertible Notes may not be
offered or sold in the United
States except pursuant to an applicable exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act. Accordingly, the Convertible Notes will be
offered only to persons reasonably believed to be "qualified
institutional buyers" under Rule 144A of the Securities Act. This
news release is neither an offer to sell nor a solicitation of an
offer to buy the Convertible Notes or any common stock issuable
upon conversion of the Convertible Notes, nor shall there be any
sale of any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Forward-Looking Statements
This news release contains forward-looking statements, including
statements related to the offerings and the expected use of the net
proceeds, which are based on current expectations, forecasts and
assumptions that involve risks and uncertainties that could cause
actual results to differ materially from any future results,
performance or achievements expressed or implied by such
forward-looking statements. These risks and uncertainties include,
without limitation, risks related to whether the company will
consummate the offering of the Convertible Notes on the expected
terms, or at all, the effects of entering into the capped call
transactions described above, market and other general economic
conditions, and the fact that the company's management will have
discretion in the use of the proceeds from the sale of the
Convertible Notes. The company refers you to the documents it files
with the Securities and Exchange Commission, specifically the
section titled "Item 1A. Risk Factors" of its annual report on Form
10-K for the year ended December 31,
2021, which contains and identifies important factors that
could cause actual results to differ materially from those
contained in the company's projections or forward-looking
statements. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on
which they are made. The company undertakes no obligation to update
any forward-looking statement, whether as a result of changes in
underlying factors, new information, future events or
otherwise.
About Live Nation Entertainment
Live Nation Entertainment (NYSE: LYV) is the world's leading
live entertainment company comprised of global market leaders:
Ticketmaster, Live Nation Concerts, and Live Nation
Sponsorship.
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SOURCE Live Nation Entertainment