On June 24, 2019 Medtronic plc (the "Company") (NYSE:MDT) reported the commencement of two cash tender offers by its wholly-owned indirect subsidiaries, Medtronic, Inc. ("Medtronic, Inc."), Medtronic Global Holdings S.C.A. ("MGH") and Covidien International Finance S.A. ("CIFSA" and, together with Medtronic, Inc. and MGH, the "Offerors") (Press release, Medtronic, JUN 24, 2019, View Source;p=RssLanding&cat=news&id=2402104 [SID1234537226]). The first tender offer (the "Any and All Tender Offer") is for any and all of $1.175 billion total aggregate principal amount of the outstanding senior notes listed in Table 1 below (the "Any and All Notes"), which were issued by Medtronic, Inc. The second tender offer (the "Maximum Tender Offer" and, together with the Any and All Tender Offer, the "Tender Offers") is for up to $3.0 billion (the "Aggregate Maximum Purchase Price") combined aggregate purchase price (excluding accrued and unpaid interest to, but not including, the applicable settlement date and excluding fees and expenses related to the Tender Offers) of the outstanding senior notes listed in Table 2 below (the "Maximum Tender Offer Notes" and, collectively with the Any and All Notes, the "Notes").
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The tables below summarize certain information regarding the Notes and the Tender Offers, including the order of priority set forth in Table 2, subject to the Series Tender Caps, if applicable, and the Aggregate Maximum Purchase Price for the Maximum Tender Offer Notes. The Any and All Notes are not subject to a cap on the aggregate purchase price.
Table 1: Any and All Notes
Title of Security
CUSIP
Numbers
Issuer/Offeror
Principal Amount
Outstanding
U.S. Treasury
Reference
Security
Bloomberg
Reference Page
Fixed Spread(1)
Early Tender Payment
(2) (3)
4.125% Senior Notes due 2021 585055AV8 Medtronic, Inc. $500,000,000 2.375% U.S.T. due 3/15/2021 PX4 15 $30
3.125% Senior Notes due 2022 585055AX4 Medtronic, Inc. $675,000,000 2.375% U.S.T. due 3/15/2022 PX5 15 $30
Table 2: Maximum Tender Offer Notes
Title of Security
CUSIP
Numbers
Issuer/Offeror
Principal Amount
Outstanding
Acceptance
Priority
Level (4)
Series Tender Cap
U.S. Treasury
Reference
Security
Bloomberg
Reference Page
Fixed Spread
Early Tender Payment (2) (3)
6.500% Senior Notes due 2039 585055AQ9 Medtronic, Inc. $182,949,000 1 N/A 3.000% U.S.T. due 2/15/2049 PX1 85 $30
5.550% Senior Notes due 2040 585055AT3 Medtronic, Inc. $305,910,000 2 N/A 3.000% U.S.T. due 2/15/2049 PX1 75 $30
4.625% Senior Notes due 2045 585055BU9 Medtronic, Inc. $1,963,341,000 3 $100,000,000 3.000% U.S.T. due 2/15/2049 PX1 70 $30
4.625% Senior Notes due 2044 585055BD7 Medtronic, Inc. $176,594,000 4 N/A 3.000% U.S.T. due 2/15/2049 PX1 75 $30
4.500% Senior Notes due 2042 585055AW6 Medtronic, Inc. $128,650,000 5 N/A 3.000% U.S.T. due 2/15/2049 PX1 75 $30
4.375% Senior Notes due 2035 585055BT2 Medtronic, Inc. $2,381,619,000 6 $200,000,000 3.000% U.S.T. due 2/15/2049 PX1 50 $30
4.000% Senior Notes due 2043 585055AY2 Medtronic, Inc. $325,024,000 7 N/A 3.000% U.S.T. due 2/15/2049 PX1 75 $30
3.500% Senior Notes due 2025 585055BS4 Medtronic, Inc. $4,000,000,000 8 $1,300,000,000 2.000% U.S.T. due 5/31/2024 PX1 40 $30
3.625% Senior Notes due 2024 585055BC9 Medtronic, Inc. $850,000,000 9 N/A 2.000% U.S.T. due 5/31/2024 PX1 35 $30
6.550% Senior Notes due 2037 22303QAH3 Covidien International Finance S.A. $283,536,000 10 N/A 3.000% U.S.T. due 2/15/2049 PX1 75 $30
3.350% Senior Notes due 2027 58507LAC3 Medtronic Global Holdings S.C.A. $850,000,000 11 N/A 2.375% U.S.T. due 5/15/2029 PX1 30 $30
3.150% Senior Notes due 2022 585055BR6 Medtronic, Inc. $2,500,000,000 12 N/A 1.750% U.S.T. due 6/15/2022 PX1 25 $30
3.200% Senior Notes due 2022 22303QAN0 Covidien International Finance S.A. $650,000,000 13 N/A 1.750% U.S.T. due 6/15/2022 PX1 25 $30
2.950% Senior Notes due 2023 22303QAP5 Covidien International Finance S.A. $309,516,000 14 N/A 2.000% U.S.T. due 5/31/2024 PX1 25 $30
(1) If the Total Consideration (as defined below) based on the applicable Fixed Spread (as defined below) would have been below $1,000, then it will be equal to $1,000 per $1,000 principal amount.
(2) Per $1,000 principal amount.
(3) The Total Consideration for Notes validly tendered prior to or at the applicable Early Tender Date (as defined below) and accepted for purchase is calculated using the applicable Fixed Spread and is inclusive of the applicable Early Tender Payment (as defined below). The Total Consideration will be determined by taking into account the applicable par call date for each series of Notes, if any.
(4) The offers with respect to the Maximum Tender Offer Notes are subject to the Aggregate Maximum Purchase Price of $3.0 billion in aggregate purchase price and the Series Tender Caps. All references to the aggregate purchase price for the Maximum Tender Offer Notes include the applicable Total Consideration or Tender Offer Consideration (as defined below) and exclude applicable accrued interest and fees and expenses related to the Tender Offers. The Offerors will purchase an aggregate principal amount of Maximum Tender Offer Notes having an aggregate purchase price up to the Aggregate Maximum Purchase Price, subject to the Acceptance Priority Level and the Series Tender Caps as set forth in the table above. The Offerors reserve the right, but are under no obligation, to increase the Aggregate Maximum Purchase Price and/or any Series Tender Cap at any time, including on or after July 10, 2019, subject to applicable law, which could result in the Offerors purchasing an aggregate principal amount of Maximum Tender Offer Notes having a greater aggregate purchase price in the Maximum Tender Offers and/or purchasing an aggregate principal amount of such series of Capped Notes (as defined below) above the applicable sublimit set forth herein.
The Tender Offers are being made pursuant to an Offer to Purchase, dated June 24, 2019 (the "Offer to Purchase"), which sets forth the terms and conditions of the Tender Offers. The Tender Offers will expire at 12:00 midnight, New York City time, on July 24, 2019 (one minute after 11:59 p.m., New York City time, on July 24, 2019), or any other date and time to which such Tender Offer is extended (such date and time, as it may be extended with respect to a Tender Offer, the "Expiration Date"), unless earlier terminated. Holders of Notes must validly tender and not validly withdraw their Notes prior to 5:00 p.m., New York City time, on July 9, 2019, (such date and time, as it may be extended with respect to a Tender Offer, the "Early Tender Date"), to be eligible to receive the Total Consideration (as defined below), which is inclusive of the applicable cash amount set forth in the above tables under the heading "Early Tender Payment" (the "Early Tender Payment"). Holders of Notes who validly tender their Notes after the Early Tender Date but prior to the applicable Expiration Date will only be eligible to receive the applicable Tender Offer Consideration.
All holders of Notes accepted for purchase will also receive accrued and unpaid interest on Notes validly tendered and accepted for purchase from the applicable last interest payment date up to, but not including, the applicable settlement date.
The applicable consideration (the "Total Consideration") offered per $1,000 principal amount of Notes of each series validly tendered and accepted for purchase pursuant to the applicable Tender Offer will be determined in the manner described in the Offer to Purchase by reference to the applicable "Fixed Spread" for such Notes specified in the tables above plus the applicable yield to maturity based on the bid-side price of the applicable "U.S. Treasury Reference Security" specified in the tables above as quoted on the applicable page on the Bloomberg Bond Trader at 11:00 a.m., New York City time, on the first business day following the Early Tender Date which is expected to be July 10, 2019. The "Tender Offer Consideration" is equal to the Total Consideration minus the Early Tender Payment.
Maximum Tender Offer Notes tendered prior to or at the Early Tender Date and accepted for purchase will be accepted based on the acceptance priority levels noted on the front cover hereof, with 1 being the highest Acceptance Priority Level and 14 being the lowest Acceptance Priority Level (the "Acceptance Priority Levels") and will have priority over Maximum Tender Offer Notes tendered after the Early Tender Date, regardless of the Acceptance Priority Levels of the Maximum Tender Offer Notes tendered after the Early Tender Date. Maximum Tender Offer Notes of a series may be subject to proration if the aggregate principal amount of the Maximum Tender Offer Notes of such series validly tendered and not validly withdrawn would cause the Aggregate Maximum Purchase Price to be exceeded, or, in the case of each of the 4.625% Senior Notes due 2045, the 4.375% Senior Notes due 2035 and the 3.500% Senior Notes due 2025 (each a "Capped Note"), if the aggregate principal amount of the Capped Note validly tendered and not validly withdrawn is greater than applicable Series Tender Cap.
The Tender Offers will expire on the applicable Expiration Date. The settlement date for the Notes that are validly tendered on or prior to the Early Tender Date is expected to be July 12, 2019, the third business day following the Early Tender Date, assuming the conditions to the satisfaction of the applicable Tender Offer are satisfied. The settlement date for Notes that are validly tendered following the Early Tender Date but on or prior to the applicable Expiration Date is expected to be July 26, 2019, the second business day following the Expiration Date.
Notes that are validly tendered may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on July 9, 2019 (unless extended, the "Withdrawal Deadline"). After such time Notes may not be withdrawn unless the applicable Offeror extends the Withdrawal Deadline.
In accordance with the indentures governing the Any and All Notes, and subject to available funding, Medtronic, Inc. may give notice of redemption for the redemption of any remaining 4.125% Senior Notes due 2021 or 3.125% Senior Notes due 2022 that are not validly tendered and accepted for purchase in the Any and All Tender Offers. Any such notice of redemption may be given as early as July 10, 2019. The Offerors, the Company or their affiliates may also from time to time, after completion of the applicable Tender Offer, purchase additional Notes in the open market, in privately negotiated transactions, through tender or exchange offers or otherwise, or the applicable Offeror may redeem Notes that are redeemable pursuant to their terms.
The Offerors’ obligation to accept for payment and to pay for the Notes validly tendered in the Tender Offers is not subject to any minimum tender condition but is subject to the satisfaction or waiver of the conditions described in the Offer to Purchase, including the financing condition that the Offerors shall have closed one or more debt financings resulting in net proceeds in an amount not less than the amount required, upon the terms and subject to the conditions of the applicable Tender Offer, to purchase all the Notes validly tendered and accepted for purchase in the Tender Offers and to pay accrued interest thereon and fees and expenses associated therewith. Following the Tender Offers, the Company does not intend to pursue any additional opportunistic refinancing in the Euro market for the next year. The Offerors reserve the right, subject to applicable law, to: (i) waive any and all conditions to the Tender Offers; (ii) extend or terminate the Tender Offers; (iii) increase or decrease the Aggregate Maximum Purchase Price and Series Tender Caps; or (iv) otherwise amend any of the Tender Offers in any respect.
Information Relating to the Tender Offers
Barclays Capital Inc., BofA Merrill Lynch and Goldman Sachs & Co. LLC are acting as the dealer managers (the "Dealer Managers") for the Tender Offers. The information agent and tender agent is Global Bondholder Services Corporation ("Global Bondholder"). Copies of the Offer to Purchase and related offering materials are available by contacting Global Bondholder at +1-866-470-4200 (U.S. toll-free) or +1-212-430-3774 (banks and brokers). Questions regarding the Tender Offer should be directed to Barclays Capital Inc., Liability Management Group at +1-212-528-7581 (collect) or +1-800-438-3242 (toll free), BofA Merrill Lynch, Liability Management Group, at +1-980-387-3907 (collect) or +1-888-292-0070 (toll-free) or Goldman Sachs & Co. LLC at +1-212-357-0215 (collect) or +1-800-828-3182 (toll-free).
None of the Offerors, the Company or their affiliates, their respective boards of directors or managing members, the Dealer Managers, Global Bondholder or the trustee with respect to any series of Notes is making any recommendation as to whether holders of Notes should tender any Notes in response to any of the Tender Offers, and neither the Offerors nor any such other person has authorized any person to make any such recommendation. Holders of Notes must make their own decision as to whether to tender any of their Notes, and, if so, the principal amount of Notes to tender.
This press release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The Tender Offers are being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law.
The full details of the Tender Offers, including complete instruction on how to tender Notes, are included in the Offer to Purchase. The Offer to Purchase contains important information that should be read by holders of Notes before making a decision to tender any Notes. The Offer to Purchase may be downloaded from Global Bondholder’s website at View Source or obtained from Global Bondholder, free of charge, by calling toll-free at +1-866-470-4200 (bankers and brokers can call collect at +1-212-430-3774).