Summary
This 8-K filing from Becton, Dickinson and Company (BDX) primarily concerns the upcoming mandatory conversion of its 6.125% Mandatory Convertible Preferred Stock, Series A, which is scheduled to convert into BDX common stock on May 1, 2020. The company has elected to adjust the conversion rates for this preferred stock to account for previously deferred adjustments related to excess quarterly cash dividends paid out since the offering in May 2017. Investors should note that the conversion rate will fall within a specified range, and the filing details the updated minimum and maximum conversion rates. This event represents a significant change in the company's capital structure, as preferred shares will be converted into common equity, potentially impacting earnings per share and shareholder dilution. The exact number of common shares issued will depend on the market price of BDX common stock around the conversion date, within the defined conversion rate parameters.
Key Highlights
- 1Becton, Dickinson and Company (BDX) is preparing for the mandatory conversion of its 6.125% Mandatory Convertible Preferred Stock, Series A, on May 1, 2020.
- 2The company has deferred adjustments to the conversion rates for the preferred stock due to quarterly cash dividends paid in excess of $0.73 per share.
- 3BDX will now adjust the conversion rates to reflect the cumulative effect of these previously deferred dividend adjustments.
- 4The updated minimum conversion rate will be approximately 4.7284 shares of common stock per share of preferred stock (0.2364 shares per depositary share).
- 5The updated maximum conversion rate will be approximately 5.6740 shares of common stock per share of preferred stock (0.2837 shares per depositary share).
- 6This conversion will transform preferred equity into common equity, impacting the share count and potentially EPS.
- 7The conversion is subject to terms outlined in the original offering, including anti-dilution adjustments.