By Abigail W. Adams
Portland, Me., Sept. 14 – AMC Entertainment Holdings Inc. priced $600 million of six-year convertible notes on Friday with a coupon of 2.95% and an initial conversion premium of 17.1%, according to a company news release.
The convertible notes were sold to private equity firm Silver Lake in a private placement.
Goldman Sachs & Co. LLC and Weil, Gotshal and Manges LLP acted as advisers and legal counsel to the company.
The notes may not be converted for one year.
As part of the transaction, Silver Lake will appoint one director to the AMC board of directors with AMC agreeing to add an independent director with support from Silver Lake, according to the news release.
Approximately $421 million of the proceeds will be used to repurchase 24,057,143 class B common shares from Dalian Wanda Group Co., Ltd. at a price of $17.50 per share, representing a 12.9% discount from Thursday’s close.
The repurchase reduces Wanda’s ownership of AMC through class B common shares to 50.01%.
Wanda’s stake in the company would be reduced to 38% assuming the full conversion of the convertible notes.
Approximately $160 million of the proceeds will be used to fund a $1.55 special dividend to class A and class B shareholders.
Remaining proceeds will be used for general corporate purposes.
AMC is a Leawood, Kan.-based operator of movie theaters. Silver Lake is a Menlo Park, Calif.-based private equity firm focused on leveraged buyout and growth capital investments in technology.
| Issuer: | AMC Entertainment Holdings Inc.
|
| Securities: | Senior unsecured convertible notes
|
| Amount: | $600 million
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| Maturity: | 2024
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| Advisers: | Goldman Sachs & Co. LLC and Weil, Gotshal and Manges LLP
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| Investor: | Silver Lake
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| Coupon: | 2.95%
|
| Conversion premium: | 17.1%
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| Conversion price: | $20.50 pre-dividend
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| Pricing date: | Sept. 14
|
| Distribution: | Private placement
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| Stock symbol: | NYSE: AMC
|
| Stock price: | $20.10 at market close Sept. 13
|
| Market capitalization: | $2.55 billion
|
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