Beyond Meat expects to raise $979.4 million from its debt offering after deducting the initial purchasers’ offering expenses, discounts, and commissions.
Beyond Meat (BYND), the plant-based meat company, intends to use $73 million of the net proceeds to fund the cost of capped call transactions in relation to the pricing of notes and the remainder of the amount for general corporate purposes and working capital.
BYND has offered $1 billion zero-interest, senior, unsecured convertible notes due 2027 in a private placement to institutional buyers. This was an upsized offering from the earlier announced offering size of $750 million.
The issuance and sale of the notes is expected to settle on March 5. The company will also grant the initial purchasers of the notes an option to buy up to an additional $150 million principal amount of notes for settlement within a period of 13 days from, and including, the date the notes are first issued.
The convertible notes are expected to mature on March 15, 2027. But noteholders can convert the notes from and after Dec. 15, 2026, and BYND can settle the conversion either in cash or in a combination of cash and shares.
The initial conversion rate will be 4.8544 shares per $1,000 principal amount of notes, indicating a conversion price of $206 per common stock. The conversion price represents a premium of 47.5% over the reported sale price of $139.66 per BYND share as of March 2.
The notes will be redeemable in whole or in part for cash on or after March 20, 2024 and on or before the 20th trading day immediately before the maturity date “but only if the last reported sale price per share of Beyond Meat’s common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid special and additional interest, if any, to, but excluding, the redemption date.”
Last month, BYND reported an adjusted net loss per share in 4Q of $0.34, which widened from the $0.01 loss per share reported during the same period last year. Analysts were expecting an adjusted net loss per share of $0.13. Revenue for the quarter came in at $101.9 million, up by 3.5% year-on-year but falling short of the $103.2 million consensus estimate. (See Beyond Meat stock analysis on TipRanks)
On March 1, DA Davidson analyst Brian Holland raised the price target from $133 to $145 and reiterated a Sell on the stock. Holland believes the stock will “respond favorably to headlines and shrug off the near-term sales and EBITDA disappointment.”
The rest of the Street is sidelined on the stock with a Hold consensus rating based on 2 Buys, 8 Holds, and 4 Sells. The average analyst price target of $139.75 implies that shares are almost fully priced at current levels.
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