Sonic Automotive Completes Concurrent Offerings of Class A Common Stock and Convertible Senior Notes, Including Full Over-Allotment Options
CHARLOTTE, N.C., Sept. 23 /PRNewswire-FirstCall/ -- Sonic Automotive, Inc. (NYSE: SAH) today announced it has completed its previously announced concurrent public offerings of 10,350,000 shares of Class A common stock and $172.5 million aggregate principal amount of 5.0% convertible senior notes due 2029 (the "convertible senior notes"), including the exercise in full of the underwriters' options to purchase additional securities in each offering. The offerings were made pursuant to Sonic Automotive's registration statement (including a prospectus and related prospectus supplement for each of the common stock and convertible senior notes offerings). The total net proceeds from the offerings will be approximately $266.4 million, after deducting underwriters' discounts and commission and before offering expenses.
The convertible senior notes will be convertible, under certain circumstances, into cash, shares of Sonic Automotive Class A common stock, or a combination of cash and shares of Sonic Automotive Class A common stock, at the option of Sonic Automotive, at an initial conversion rate of 74.7245 shares of Class A common stock per $1,000 principal amount of convertible senior notes, which is equivalent to an initial conversion price of approximately $13.38 per share of Class A common stock, subject to adjustment in certain circumstances. This initial conversion price represents a premium of 32.5% relative to the public offering price of Sonic Automotive's Class A common stock of $10.10 per share in the common stock offering.
The convertible senior notes bear interest at an annual rate of 5.0%, which is payable semi-annually on April 1 and October 1 each year (beginning on April 1, 2010), until maturity on October 1, 2029 or earlier redemption, conversion or repurchase. Sonic Automotive may not redeem the convertible senior notes prior to October 1, 2014. Holders of the convertible senior notes may require Sonic Automotive to repurchase the convertible senior notes on October 1, 2014, October 1, 2019 and October 1, 2024 for cash at a purchase price equal to 100% of the principal amount thereof to be repurchased plus accrued and unpaid interest. In addition, holders of the convertible senior notes may require Sonic Automotive to repurchase all or a portion of their convertible senior notes upon a fundamental change at a cash purchase price equal to 100% of the principal amount thereof to be repurchased plus accrued and unpaid interest.
Sonic Automotive intends to use the net proceeds from these offerings to repay (A) all or a portion of the principal amount outstanding on its 4.25% Convertible Senior Subordinated Notes due 2015 (which the holders can require Sonic Automotive to repurchase in November 2010), (B) all of the principal amount outstanding on its 6.00% Convertible Senior Secured Notes due 2012, and (C) for remaining net proceeds, a portion of the principal amounts outstanding under its credit facility.
J.P. Morgan Securities Inc. and BofA Merrill Lynch acted as joint book-running managers for the offerings. Wells Fargo Securities, Moelis & Company and Stephens Inc. acted as co-managers for the offerings.
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is the nation's third-largest automotive retailer, operating 153 franchises.
Included herein are forward-looking statements pertaining to repurchase of Sonic Automotive's 4.25% Convertible Senior Subordinated Notes due 2015 and its 6.00% Convertible Senior Secured Notes due 2012. There are many factors that affect management's views about future events and trends of Sonic Automotive's business. These factors involve risks and uncertainties that could cause actual results or trends to differ materially from management's view, including without limitation, economic conditions, risks associated with acquisitions and risk factors described in Exhibit 99.1 to Sonic Automotive's Current Report on Form 8-K furnished on August 21, 2009 and in its other filings with the Securities and Exchange Commission. Sonic Automotive does not undertake any obligation to update forward-looking information.
SOURCE Sonic Automotive, Inc.
Released September 23, 2009