By Abigail W. Adams
Portland, Me., March 2 – Shake Shack Inc. priced $225 million of seven-year convertible notes after the market close on Monday at par at the rich end of talk with a coupon of 0% and an initial conversion premium of 45%, according to a company news release.
Price talk was for a coupon of 0% to 0.25% and an initial conversion premium of 40% to 45%, according to a market source.
J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $25 million.
The notes are non-callable until March 6, 2025 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are estimated to be $217.9 million or will be $242.3 million if the greenshoe is exercised in full.
Proceeds will be used to support growth and development, for working capital and for other general corporate purposes.
Shake Shack is a New York-based fast food restaurant chain.
| Issuer: | Shake Shack Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $225 million
|
| Greenshoe: | $25 million
|
| Maturity: | March 1, 2028
|
| Bookrunners: | J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 45%
|
| Conversion price: | $170.42
|
| Conversion rate: | 5.8679
|
| Call options: | Non-callable until March 6, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 1
|
| Settlement date: | March 4
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0% to 0.25% and initial conversion premium of 40% to 45%
|
| Stock symbol: | NYSE: SHAK
|
| Stock price: | $117.53 at market close March 1
|
| Market capitalization: | $4.87 billion
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