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Tapestry 8-K Report, Material Agreement (Nov 22, 2024)

Reports
Material Agreements·Financial Events·Regulation FD+1
Filing Date
Filed November 22, 2024
Period End
November 21, 2024
Security
TPR
In the record · 2016–202610-K1110-Q328-K145

TPR filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 145 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Aug ’18Aug ’18
  2. Restructuring8-K · Aug ’20Aug ’20
  3. Material agreement8-K · May ’22May ’22
  4. Leadership change8-K · Apr ’26Apr ’26

01—Abstract

Summary

Summary of the 8-K filed November 22, 2024. Cited figures are marked; the original filing is the authoritative source.

On November 21, 2024, Tapestry, Inc. (NYSE: TPR) entered into accelerated share repurchase (ASR) agreements with Bank of America, N.A. and Morgan Stanley & Co. LLC to repurchase an aggregate of up to $2.0 billiona of its common stock under its recently announced share repurchase program.

The company will pay $2.0 billionb to the Dealers on November 26, 2024 and receive an initial delivery of 28,363,766 shares that day. The final share count will be based on the average daily volume-weighted average price over specified dates, less a discount, and final settlements are scheduled no later than the first quarter of fiscal 2026, ending September 27, 2025. The repurchases are funded with $750.0 million of borrowings under a new senior unsecured term loan facility, approximately $1.0 billion of revolving credit facility borrowings, and cash on hand.

The term loan matures six months after funding and bears interest at term SOFR plus 1.125%. The company expects to refinance the term loan with new debt or other existing liquidity. After the ASRs, $800.0 millionc remains available under the share repurchase authorization approved by the board in May 2022.

In a press release furnished as Exhibit 99.1, the company said the ASRs will be completed under its recently expanded $2.8 billiond share repurchase authorization and that it expects to return over 100 percent of its free cash flow in fiscal 2025 to shareholders through dividends and share repurchases. The initial delivery is expected to represent approximately 80 percent of the shares expected to be repurchased under the ASR agreements.

02—Key points

Key Highlights

  1. Tapestry entered into ASR agreements with Bank of America, N.A. and Morgan Stanley & Co. LLC to repurchase up to $2.0 billion of common stock.
  2. Initial delivery of 28,363,766 shares is scheduled for November 26, 2024, when the company pays $2.0 billion to the Dealers.
  3. Funding comes from $750.0 million of new term loan borrowings, approximately $1.0 billion of revolver borrowings, and cash on hand.
  4. New $750.0 million senior unsecured term loan matures six months after funding and bears interest at term SOFR plus 1.125%.
  5. Final ASR settlements are expected no later than the first quarter of fiscal 2026, ending September 27, 2025.
  6. Approximately $800.0 million remains available under the share repurchase authorization after the ASRs.
  7. Company expects to return over 100 percent of its fiscal 2025 free cash flow to shareholders through dividends and share repurchases.

03—Questions

Frequently Asked Questions

  1. How many shares will Tapestry ultimately repurchase under the ASR agreements?

    The filing does not state a final share count. The initial delivery is 28,363,766 shares on November 26, 2024, and the final number will be based on the average daily VWAP over specified dates during each agreement's term, less a discount, with possible additional deliveries or payments at settlement.

  2. How is Tapestry funding the $2.0 billion share repurchase?

    The company is using $750.0 million of borrowings under a new term loan credit facility, approximately $1.0 billion of revolving credit facility borrowings, and cash on hand. It expects to refinance the term loan with new debt or other existing liquidity.

  3. What are the terms of the new term loan?

    It is a $750.0 million senior unsecured term loan with Bank of America, N.A. as administrative agent. Borrowings mature six months after the funding date and bear interest at term SOFR plus 1.125%. It requires prepayment from certain asset sales and debt or equity issuances, and contains customary covenants and events of default.

  4. How much capacity remains under the share repurchase authorization?

    After giving effect to the ASR agreements, $800.0 million remains available under the share repurchase program authorized by the board in May 2022. The press release describes the ASRs as being completed under a recently expanded $2.8 billion authorization.

04—Continue

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