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Adidas to issue up to €500M equity-neutral convertible bond

Germany-based Adidas AG said Sept. 5 it is issuing an equity-neutral convertible bond of up to €500 million, with a five-year term.

Net proceeds from the issuance will be used to finance a part of the multiyear share buyback program announced in March and for general corporate purposes. Under the current share buyback plan, the company bought back around 3.5 million shares worth €677 million until Aug. 31. The luxury goods and apparel manufacturer intends to buy back shares of up to €3.0 billion until May 2021.

The executive board issued the convertible bond on Sept. 5 at a price range between 104% and 108% of its nominal value of €200,000.

The convertible bond offering, which will be done through accelerated book building process, is expected to close Sept. 12, and Adidas intends to apply for the convertible bond to be included in the Open Market segment of the Frankfurt Stock Exchange.

The company said that the equity-neutral offering will only be settled in cash and not through new or existing shares of Adidas. Concurrently, Adidas will purchase call options to hedge the economic exposure of Adidas to pay cash amounts upon any exercise of conversion rights by investors.

Citigroup Global Markets Limited is acting as sole global coordinator, and together with HSBC, Deutsche Bank AG, BofA Merrill Lynch and Unicredit AG, as joint book runners for the offering.