WisdomTree, a global financial innovator, announced its intention to offer, subject to market conditions and other factors, $400 million aggregate principal amount of convertible senior notes due 2030 (the “notes”) in a private offering (the “offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). WisdomTree also expects to grant the initial purchasers of the notes an option to purchase up to an additional $60 million aggregate principal amount of the notes to be settled during a period of 13 days from, and including, the date the notes are first issued.

WisdomTree intends to use $275.0 million of the net proceeds from the offering to pay the closing consideration for its previously announced acquisition of Ceres Partners, LLC (the “Acquisition”); a portion of the net proceeds from the offering to repurchase up to all $25.8 million in aggregate principal amount of its remaining outstanding 5.75% convertible senior notes due 2028 (the “2028 notes”) as described below; approximately $80.0 million of the net proceeds from the offering to repurchase shares of WisdomTree’s common stock from certain purchasers of the notes as described below; and the remainder of the net proceeds from the offering, if any, for working capital and other general corporate purposes, which may include the repayment of indebtedness, including under its 3.25% convertible senior notes due 2026 and its 3.25% convertible senior notes due 2029. If the Acquisition is not consummated, WisdomTree intends to use the proceeds it would have otherwise used to finance the Acquisition for general corporate purposes as described above.

Prior to May 15, 2030, the notes will be convertible at the option of the holders of the notes only upon the satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, WisdomTree will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at WisdomTree’s election, in respect of the remainder, if any, of WisdomTree’s conversion obligation in excess of the aggregate principal amount of the notes being converted. The notes will also be redeemable, in whole or in part, for cash at WisdomTree’s option at any time, and from time to time, on or after August 20, 2027 in certain circumstances. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.

Contemporaneously with the pricing of the notes in the offering, WisdomTree intends to enter into separate privately negotiated transactions to repurchase up to all $25.8 million in aggregate principal amount of its remaining 2028 notes, on terms to be negotiated with the holders thereof and effected through one of the initial purchasers of the notes, as its agent (each a “note repurchase” and collectively the “2028 notes repurchases”). The terms of each note repurchase are anticipated to be negotiated with holders of the 2028 notes on an individual basis and will depend on several factors, including the market price of WisdomTree’s common stock and the trading price of the 2028 notes at the time of each such note repurchase. No assurance can be given as to how much, if any, of the 2028 notes will be repurchased or the terms on which they will be repurchased. The consideration for any such note repurchases will be cash financed with a portion of the net proceeds from the offering.

WisdomTree expects that certain holders of the 2028 notes that sell their 2028 notes in negotiated transactions with WisdomTree may enter into or unwind various derivatives with respect to WisdomTree’s common stock and/or purchase shares of its common stock in the market. In addition, WisdomTree expects that certain purchasers of the notes offered in the offering may establish a short position with respect to its common stock by short selling the common stock or by entering into short derivative positions with respect to the common stock, in each case, in connection with the offering. The net effect of the above market activities by holders of the 2028 notes and purchasers of the notes offered in the offering could increase (or reduce the size of any decrease in) or decrease (or reduce the size of any increase in) the market price of WisdomTree’s common stock and/or the market price of the notes offered in the offering, and WisdomTree cannot predict the magnitude of such market activities or the overall effect they will have on the market price of the notes and/or the market price of its common stock.

WisdomTree intends to use approximately $80.0 million of the net proceeds from the offering to repurchase shares of its common stock from certain purchasers of the notes in privately negotiated transactions effected through one of the initial purchasers of the notes, as its agent, concurrently with the pricing of the offering. The price per share of WisdomTree’s common stock repurchased in such transactions is expected to equal the last reported price per share of its common stock as of the date of the pricing of the notes. These repurchases could increase (or reduce the size of any decrease in) the market price of WisdomTree’s common stock and/or the market price of the notes offered in the offering. WisdomTree cannot predict the magnitude of such market activity or the overall effect it will have on the price of the notes offered hereby or WisdomTree’s common stock.

The notes will only be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The notes and the common stock issuable upon conversion of the notes, if any, have not been and will not be registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an applicable exemption from such registration requirements.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Source: WisdomTree