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LOS ANGELES, December 5, 2022—(BUSINESS WIRE)–Herbalife Nutrition Ltd. (NISE: HLF) (the “Company”) announced today that it intends, subject to market and other conditions, to offer an aggregate principal amount of $250 million of convertible notes due 2028 (the “Convertible Notes”) in a private offering to persons for whom are reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). In addition, the Company expects to grant the initial purchasers of the convertible notes the option to purchase, for settlement within 13 days from, including the date the convertible notes are first issued, up to an additional $37.5 million in principal amount of the convertible notes.
The final terms of the Convertible Notes, including the initial conversion price, interest rate and certain other terms of the Convertible Notes, will be determined at the time of pricing. The convertible notes will be senior, unsecured obligations of the Company and are expected to pay interest semiannually. Upon conversion, the Convertible Notes will be settled in cash and, if applicable, in the Company’s common stock, based on a conversion rate to be determined at the price of the Convertible Notes. The convertible notes will mature on June 15, 2028 unless redeemed, repurchased or converted in accordance with their terms prior to that date. Prior to March 15, 2028, the convertible notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter at any time until the next scheduled trading day immediately preceding the maturity date.
The Convertible Notes will be redeemable, in whole or in part, at the option of the Company at any time and from time to time on or after June 15, 2026, but only if the last reported sale price per Common Share exceeds 130% of the conversion price of the Convertible Notes on (i) each of at least 20 trading days (whether consecutive or not) during the 30 consecutive trading days ending, including, the trading day immediately preceding the date on which the Company sends the applicable redemption notice; and (ii) the trading day immediately preceding the date on which the Company sends such redemption notice. In addition, the Company will have the right to redeem all, but not less than all, of the convertible notes if certain changes in tax law occur. The redemption price will be equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date.
The Company expects to use the net proceeds of the offering to repurchase a portion of the Company’s existing 2.625% convertible notes due 2024 (the “Existing Convertible Notes”) from a limited number of holders in privately negotiated transactions, and the remaining net proceeds for general corporate purposes.
Holders of the existing convertible notes redeemed in the concurrent private repurchases described above may purchase the Company’s common stock in the open market to unwind any hedge positions they may have with respect to the existing convertible notes or, if they purchase the convertible notes in the offerings, may increase their existing or enter into new hedge positions. The net impact of these activities may adversely affect the trading price of the Company’s common stock.
This press release is neither an offer to sell nor the solicitation of an offer to buy the convertible notes or common stock issuable upon conversion of the convertible notes, nor will there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be illegal prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer, if any, will be made only in accordance with Rule 144A under the Securities Act.
The Convertible Notes and any common stock issuable upon conversion of the Convertible Notes have not been and are not expected to be registered under the Securities Act or the securities laws of any other jurisdiction, and may not be offered or sold in the United States in absent registration or an applicable exemption from the registration requirement.
About Herbalife Nutrition Ltd.
Herbalife Nutrition is a global company that has been changing people’s lives since 1980 with great nutritional products and a business opportunity for its independent distributors. The company offers science-based products to consumers in 95 markets through entrepreneur distributors who provide one-on-one training and a supportive community that inspires their customers to embrace healthier, more active lifestyles. Through the company’s commitment to nourishing people, communities and the planet, Herbalife Nutrition is committed to achieving 50 million positive impacts – tangible acts of good – by 2030, its 50th anniversary.
Forward-looking statements
This release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations expressed in any of our forward-looking statements are reasonable, actual results or outcomes may could differ materially from those anticipated or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as all forward-looking statements, are subject to change and inherent risks and uncertainties, many of which are beyond our control. In addition, many of these risks and uncertainties have been, and may continue to be, exacerbated by the COVID-19 pandemic. Important factors that could cause our actual results, performance and achievements or industry results to differ materially from the estimates or projections contained or implied in our forward-looking statements include the following:
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the potential impacts of the COVID-19 pandemic and current global economic conditions, including inflation, on us; our members, customers and supply chain; and the world economy;
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our ability to attract and retain members;
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our relationship with our members and our ability to influence the actions of our members;
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our failure to comply with or improper actions by our employees or members that violate applicable US and foreign laws, rules and regulations;
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adverse publicity associated with our company or the direct selling industry, including our ability to satisfy the market and regulators regarding our compliance with applicable laws;
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changing consumer preferences and demands and developing industry standards, including with respect to climate change, sustainability and other environmental, social and governance or ESG issues;
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the competitive nature of our business and industry;
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legal and regulatory matters, including regulatory actions related to our products or network marketing programs and product liability claims or legal challenges thereof;
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Consent Order entered into with the FTC, the consequences thereof and any failure to comply therewith;
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risks associated with doing business internationally and in China;
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our ability to execute our growth and other strategic initiatives, including the implementation of our transformation program and increased penetration of our existing markets;
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any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, including the war in Ukraine, cyber security incidents, pandemics and/or other acts of third parties;
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our ability to adequately source ingredients, packaging materials and other raw materials and manufacture and distribute our products;
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our reliance on our information technology infrastructure;
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failure by us or our members to comply with any privacy laws, rules or regulations or any breach of security involving the misappropriation, loss or other unauthorized use or disclosure of confidential information;
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contractual restrictions on our ability to expand or change our direct sales business model;
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the adequacy of our trademarks and other intellectual property;
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product concentration;
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our reliance on, loss or departure of any member of our senior management team;
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restrictions imposed by the covenants in the agreements governing our indebtedness;
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risks related to our convertible notes;
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changes and uncertainties related to the application of transfer pricing, income tax, customs, value added tax and other tax laws, treaties and regulations, or their interpretation;
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our incorporation under the laws of the Cayman Islands; and
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stock price volatility related to, among other things, speculative trading and certain traders shorting our common stock.
We undertake no obligation to update or publish any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unforeseeable events, except as required by law.
See the original version on businesswire.com: https://www.businessvire.com/nevs/home/20221203005024/en/
Contacts
Media contact:
Gary Kishner
Senior Director of Media Relations
213.745.0456
Investor contact:
Eric Monroe
Senior Director of Investor Relations
213.745.0449
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