What is the purpose of issuing the Series C Preferred Stock?

The Series C Preferred Stock was issued to BDX's employee benefit trusts in exchange for their common stock. The primary purpose is to prevent these trusts from receiving shares of Embecta Corp. common stock during the planned distribution, ensuring a cleaner separation of the diabetes care business.

How does this affect current BDX shareholders?

For current BDX shareholders, this action is primarily administrative regarding the upcoming spin-off of Embecta. It ensures that the trusts' holdings are managed appropriately in the context of the distribution. The filing also provides details on trading mechanics ('when-issued' and 'ex-distribution') for both BDX and Embecta shares, which is important for understanding how the market will price these securities around the spin-off date.

What are the terms of the Series C Preferred Stock?

The Series C Preferred Stock is redeemable. At BDX's option, it can be redeemed for shares of Embecta Common Stock. If the spin-off transaction is completed, the preferred shares will automatically be redeemed by BDX for a specified number of BDX Common Stock shares. Specific details, including redemption rates and other rights, are outlined in the Certificate of Designation.

Was this issuance of preferred stock registered with the SEC?

No, the issuance of the Series C Preferred Stock was conducted in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. This typically applies to transactions not involving a public offering.

BDX 8-K: Securities & Listing & Corporate Changes

Summary

Becton, Dickinson and Company (BDX) filed an 8-K detailing actions related to its planned spin-off of the diabetes care business into Embecta Corp. The company issued Series C Junior Participating Redeemable Preferred Stock to its employee benefit trusts in exchange for common stock. This issuance, conducted under an exemption from registration, is designed to prevent the trusts from receiving Embecta shares in the upcoming distribution, thereby streamlining the spin-off process. The preferred shares are redeemable, either at the company's option for Embecta shares or automatically for BDX common stock if the spin-off is completed. Furthermore, BDX announced details regarding the "when-issued" trading of Embecta shares and the "ex-distribution" trading of BDX shares in conjunction with the spin-off. This filing provides clarity on the mechanics of the separation and the treatment of certain equity holdings, which are important considerations for investors anticipating the transaction. Investors should review the Certificate of Designation for complete details on the preferred stock's terms.

Key Highlights

1BDX issued Series C Junior Participating Redeemable Preferred Stock to its employee benefit trusts.
2The preferred stock issuance was done in exchange for common stock held by the trusts.
3This transaction is intended to ensure the trusts do not receive shares of Embecta Corp. in the planned spin-off.
4The preferred shares are redeemable for Embecta Common Stock or BDX Common Stock, depending on the spin-off's completion.
5The issuance of preferred shares was conducted under Section 4(a)(2) of the Securities Act of 1933, exempting it from standard registration requirements.
6BDX announced details about 'when-issued' trading for Embecta shares and 'ex-distribution' trading for BDX shares related to the spin-off.

BECTON DICKINSON & CO 8-K Report, Unregistered Securities Sale (Mar 21, 2022)

Summary

Key Highlights

Frequently Asked Questions