Summary
Regeneron Pharmaceuticals, Inc. (REGN) has filed a Form 8-K detailing a significant amendment to its warrant agreement with Citibank, N.A. (Citi). This Second Amendment, effective February 19, 2016, allows Regeneron to reduce its outstanding warrants held by Citi by up to 975,142, representing approximately 97% of the remaining warrants. The company anticipates paying up to $214.8 million to facilitate this reduction. The reduction process will occur daily from February 22, 2016, to May 5, 2016, with payments based on the volume-weighted average price of Regeneron's common stock as Citi closes out its hedging positions. Regeneron has the flexibility to settle these payments in cash or by issuing shares of its common stock, subject to a cap of 250,000 shares for settlement and any potential make-whole provisions. This move is likely intended to streamline its capital structure and potentially reduce future dilution.
Key Highlights
- 1Regeneron entered into a Second Amendment to its warrant agreement with Citibank, N.A., effective February 19, 2016.
- 2The amendment allows for the reduction of up to 975,142 outstanding warrants held by Citi, representing approximately 97% of the remaining warrants.
- 3Regeneron expects to pay a maximum aggregate amount of $214.8 million for this warrant reduction.
- 4The reduction will be implemented daily between February 22, 2016, and May 5, 2016.
- 5Payments will be based on the volume-weighted average price of Regeneron's common stock as Citi unwinds its hedging positions.
- 6Regeneron has the option to settle these payments using cash or by issuing shares of its common stock.
- 7The issuance of shares for settlement is capped at a total of 250,000 shares, including any make-whole shares.