CHARLOTTE, N.C. - Coca-Cola (NYSE:KO) Consolidated, Inc. (NASDAQ: COKE), the largest Coca-Cola bottler in the U.S., announced a modified Dutch auction tender offer to repurchase up to $2.0 billion of its common stock. The tender offer, which commenced today, invites shareholders to sell their shares at a price between $850 and $925 per share, in cash, subject to certain conditions.
The specifics of the tender offer include odd lot priority and conditional tenders, which may be applied if the total cost to repurchase all validly tendered shares exceeds the $2.0 billion limit. The final purchase price will be the lowest price within the specified range that allows the company to buy back the maximum value of shares.
Shares tendered at prices above the final purchase price will be returned to shareholders. The offer is scheduled to expire at 5:00 p.m., New York City time, on June 18, 2024, unless extended or terminated by the company. Shareholders can withdraw their tendered shares any time before the expiration of the offer.
To finance the buyback, Coca-Cola Consolidated plans to use a combination of cash on hand, borrowings under its revolving credit facility, new term loan facilities, and possibly the proceeds from an offering of senior unsecured notes. The buyback is subject to the company securing at least $2.5 billion in gross proceeds from new term loan facilities and/or note offerings, a condition that, if unmet, may lead to amendment, extension, or termination of the tender offer.
Innisfree M&A Incorporated has been appointed as the information agent, and Equiniti Trust Company, LLC will act as the depositary for the tender offer. Rothschild & Co is serving as an advisor to Coca-Cola Consolidated for the transaction.
This tender offer is part of a strategic move by Coca-Cola Consolidated to manage its capital structure and return value to its shareholders.
The information provided in this article is based on a press release statement.
InvestingPro Insights
Amidst Coca-Cola Consolidated's strategic initiative to repurchase up to $2.0 billion of its common stock, investors may find it useful to consider the company's current financial metrics and performance indicators. According to InvestingPro data, Coca-Cola Consolidated has a market capitalization of approximately $8.78 billion and is trading at a P/E ratio of 19.35, which is adjusted to 14.3 for the last twelve months as of Q1 2024. This might indicate that the company is valued at a premium relative to its near-term earnings growth.
The company's commitment to shareholder returns is underscored by its long-standing history of dividend payments, having maintained them for 53 consecutive years. With a dividend yield of 1.97% as of the latest data, shareholders have enjoyed consistent returns. Moreover, the company's liquid assets surpassing short-term obligations and a moderate level of debt, as indicated by InvestingPro tips, suggest a balanced approach to financial management.
InvestingPro tips also highlight that Coca-Cola Consolidated has experienced a strong return over the last month, with a 14.73% total price return. This is part of a larger trend, as the company has seen a significant price uptick over the last six months, boasting a 33.4% return. Such performance metrics can be particularly relevant for investors considering participating in the tender offer or evaluating the company's stock for potential investment.
For those interested in a deeper analysis, InvestingPro provides additional tips on Coca-Cola Consolidated, which could further inform investment decisions. By visiting the dedicated page for Coca-Cola Consolidated on InvestingPro, investors can access these insights. Additionally, for a limited time, users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a total of 11 InvestingPro Tips related to the company.
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