KRAFT HEINZ The Kraft Heinz Company (“Kraft Heinz”) (Nasdaq: KHC) today announced the early tender results of the previously announced offer by its 100% owned operating subsidiary Kraft Heinz Foods Company (the “Issuer”) to purchase for cash (the “Tender Offer”) any validly tendered (and not subsequently validly withdrawn) notes up to a combined aggregate purchase price (excluding accrued and unpaid interest) of $2.2 billion (the “Maximum Tender Amount”) of its outstanding Floating Rate Senior Notes due February 2021 (the “February 2021 Notes”), 3.500% Senior Notes due June 2022 (the “June 2022 Notes”), 3.500% Senior Notes due July 2022 (the “July 2022 Notes”), Floating Rate Senior Notes due August 2022 (the “August 2022 Notes”), 4.000% Senior Notes due June 2023 (the “June 2023 Notes”), 3.950% Senior Notes due July 2025 (the “July 2025 Notes”) and 3.000% Senior Notes due June 2026 (the “June 2026 Notes,” and together with the February 2021 Notes, the June 2022 Notes, the July 2022 Notes, the August 2022 Notes, the June 2023 Notes and the July 2025 Notes, the “Notes” and each, a “Series” of Notes). Kraft Heinz also announced that, with respect to the Notes validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on May 15, 2020 (the “Early Tender Time”), the Issuer will elect to make payment for such Notes on May 19, 2020 (the “Early Settlement Date”).
The Tender Offer is being made on the terms and subject to the conditions set forth in the offer to purchase dated May 4, 2020, as amended by a supplement dated May 4, 2020 (together, the “Offer to Purchase”). Terms not defined in this announcement have the meanings given to them in 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 debt securities that results in net proceeds of at least $2,500,000,000, which Offering commenced and priced on May 4, 2020, on terms and conditions reasonably satisfactory to the Issuer, as well as other customary conditions.
The withdrawal deadline of 5:00 p.m., New York City time, on May 15, 2020 (the “Withdrawal Date”) has passed and, accordingly, Notes validly tendered in the Tender Offer may no longer be withdrawn except where additional withdrawal rights are required by law. 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 Date, or (iv) otherwise amend the Tender Offer in any respect.
The following table sets forth certain information regarding the Notes and the Tender Offer, including the principal amount of Notes that were validly tendered and not validly withdrawn as of the Early Tender Time according to Global Bondholder Services Corporation, the tender and information agent for the Tender Offer:
CUSIP No. / ISIN |
Title of
|
Acceptance
|
Aggregate Principal Amount
|
Aggregate Principal Amount
|
Aggregate Principal Amount
| Proration Factor | ||||||
50077LAP1 /
|
Floating Rate
| 1 | $538,788,000 | $538,788,000 | $111,212,000 | 100.00% | ||||||
50076QAZ9 /
|
3.500% Senior
| 2 | $488,121,000 | $488,121,000 | $631,263,000 | 100.00% | ||||||
50077LAJ5 /
423074BA0 /
|
3.500% Senior
| 3 | $143,590,000 | $143,590,000 | $302,271,000 | 100.00% | ||||||
50077LAQ9
|
Floating Rate
| 4 | $184,522,000 | $184,522,000 | $315,478,000 | 100.00% | ||||||
50077LAS5 /
|
4.000% Senior
| 5 | $390,829,000 | $390,829,000 | $447,302,000 | 100.00% | ||||||
50077LAK2
|
3.950% Senior
| 6 | $1,047,779,000 | $391,295,000 | $1,608,705,000 | 37.40% | ||||||
50077LAD8 /
|
3.000% Senior
| 7 | $1,101,227,000 | $0 | $2,000,000,000 | 0.00% |
As the aggregate principal amount of Notes validly tendered and not validly withdrawn as of the Early Tender Time exceeded the Maximum Tender Amount, the July 2025 Notes that were accepted for purchase by the Issuer were prorated so as to accept the maximum principal amount of the July 2025 Notes that did not result in the Maximum Tender Amount being exceeded. The Tender Offer will expire at 11:59 p.m., New York City time, at the end of the day on June 1, 2020, unless extended or earlier terminated as described in the Offer to Purchase. Since the aggregate principal amount of Notes validly tendered and not validly withdrawn as of the Early Tender Time resulted in the Maximum Tender Amount being exceeded, the Issuer will not accept for purchase any Notes tendered after the Early Tender Time unless the Maximum Tender Amount is increased.
Kraft Heinz has engaged J.P. Morgan, BofA Securities, Citigroup, Credit Suisse, Deutsche Bank Securities, and Wells Fargo Securities to act as dealer managers (collectively, the “Dealer Managers”) in connection with the Tender Offer and has appointed Global Bondholder 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 Bondholder 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 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 Bondholder 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. The Offer to Purchase contains important information which should be read carefully before any decision is made with respect to the Tender Offer. The Tender Offer is not being made in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such offer or solicitation under applicable securities or blue sky laws. 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 2019 net sales of approximately $25 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 “commit,” “plan,” “believe,” “anticipate,” “reflect,” “invest,” “make,” “expect,” “deliver,” “develop,” “drive,” “assess,” “evaluate,” “establish,” “focus,” “build,” “turn,” “expand,” “leverage,” “grow,” “remain,” “will,” 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 the Issuer's plans, costs and cost savings, legal matters, taxes, expectations, investments, innovations, opportunities, capabilities, execution, initiatives, pipeline, and growth. 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 the Issuer’s control.
Important factors that may affect the Issuer’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, market conditions and the timing and ability of the Issuer to consummate the Offering, the Tender Offer and the Concurrent Redemptions; the impact of the COVID-19 outbreak; operating in a highly competitive industry; the Issuer’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 the Issuer’s relationships with significant customers, suppliers, and other business relationships; the Issuer’s ability to maintain, extend, and expand its reputation and brand image; the Issuer’s ability to leverage its brand value to compete against private label products; the Issuer’s ability to drive revenue growth in its key product categories, increase its market share, or add products that are in faster-growing and more profitable categories; product recalls or product liability claims; unanticipated business disruptions; the Issuer’s ability to identify, complete or realize the benefits from strategic acquisitions, alliances, divestitures, joint ventures or other investments; the Issuer’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve its competitiveness; the Issuer’s ability to successfully execute its strategic initiatives; the impacts of the Issuer’s international operations; economic and political conditions in the United States and in various other nations where the Issuer does business; changes in the Issuer’s management team or other key personnel and the Issuer’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 we or the Issuer’s customers, suppliers, distributors, or regulators operate; the Issuer’s ownership structure; the Issuer’s indebtedness and ability to pay such indebtedness, as well as its ability to comply with covenants under debt instruments; the Issuer’s liquidity, capital resources, and capital expenditures, as well as the Issuer’s ability to raise capital; additional impairments of the carrying amounts of goodwill or other indefinite-lived intangible assets; foreign exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the commodity derivatives we use; 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 any potential actions resulting from the Securities and Exchange Commission’s (“SEC”) ongoing investigation, as well as potential additional subpoenas, litigation, and regulatory proceedings; an inability to remediate the material weaknesses in the Issuer’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; the Issuer’s failure to prepare and timely file its periodic reports; the Issuer’s ability to protect intellectual property rights; tax law changes or interpretations; the impact of future sales of the Issuer’s common stock in the public markets; the Issuer’s ability to continue to pay a regular dividend and the amounts of any such dividends; volatility of capital markets and other macroeconomic factors; a downgrade in our credit rating; and other factors. For additional information on these and other factors that could affect the Issuer’s forward-looking statements, see the Issuer’s risk factors, as they may be amended from time to time, set forth in its filings with the SEC. The Issuer 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.
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