Summary
Medtronic plc (MDT) filed an 8-K on June 25, 2019, to announce significant updates regarding its debt tender offers and related financing. The company announced it has upsized the maximum aggregate purchase price for one of its tender offers from $3.0 billion to $4.35 billion, increasing the combined potential total from $4.175 billion to $5.525 billion. This upsizing is supported by the pricing of a €5.0 billion senior notes offering, expected to close on July 2, 2019. Medtronic anticipates these transactions will be leverage-neutral and lead to lower interest expenses in fiscal year 2020, though this will be slightly offset by increased U.S. taxes. The full financial impact and results of the tender offers will not be known until after July 10, 2019, and no material impact is expected on the first fiscal quarter of 2020 results.
Key Highlights
- 1Medtronic has increased the maximum purchase price for its Maximum Tender Offer from $3.0 billion to $4.35 billion.
- 2The total potential aggregate amount for both the Any and All Tender Offer and the Maximum Tender Offer has been increased to $5.525 billion.
- 3The company has priced a €5.0 billion senior notes offering to help fund these tender offers.
- 4The new debt issuance and tender offers are expected to be leverage-neutral for Medtronic.
- 5Medtronic anticipates lower interest expense in FY2020 due to these transactions, partially offset by higher U.S. taxes.
- 6The financial impact will not be fully determinable until after July 10, 2019.
- 7No material impact on Q1 FY20 financial results is expected as the transactions are not set to close until late in the quarter.