Spectrum Brands Holdings Inc (SPB)

[Enterprising Investor]

Spectrum Brands and Goldman Sachs & Co. LLC enter into Accelerated Share Repurchase Agreement (6/20/23)

On June 20, 2023, Spectrum Brands Holdings, Inc.’s (the “Company”) entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman Sachs & Co. LLC (the “ASR Counterparty”) to repurchase an aggregate of $500 million of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The Company is funding the share repurchases under the ASR Agreement, which are being made pursuant to the Company’s new $1.0 billion share repurchase program, with cash on-hand following the closing of the sale of the Company’s Hardware and Home Improvement segment to ASSA ABLOY.

Under the terms of the ASR Agreement, the Company will pay an initial aggregate purchase price of $500 million to the ASR Counterparty at inception of the ASR Agreement, and the ASR Counterparty will make an aggregate initial delivery of approximately 5.3 million shares of Common Stock to the Company.

The total number of shares ultimately purchased by the Company pursuant to the ASR Agreement will generally be based on the daily volume-weighted average share price of the Common Stock during the calculation period of the ASR Agreement, less an agreed discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreement. At final settlement of the ASR Agreement, the Company may be entitled to receive additional shares of Common Stock, or, under certain limited circumstances, be required to deliver shares to the ASR Counterparty or, at the Company’s election, remit a settlement amount in cash to the ASR Counterparty. The final settlement of the transactions under the ASR Agreement is expected to occur no later than December 2023, with the settlement date for the ASR Agreement determined at the ASR Counterparty’s option within an agreed range, subject to earlier termination under certain limited circumstances, as set forth in the ASR Agreement.
The ASR Agreement contains customary terms for these types of transactions, including, but not limited to, the mechanisms to determine the number of shares of Common Stock or the amount of cash that will be delivered at settlement, the required timing of delivery of the shares of Common Stock, the specific circumstances under which adjustments may be made to the transactions, the specific circumstances under which the transactions may be terminated prior to their scheduled maturity and various acknowledgements, representations and warranties made by the Company and the ASR Counterparty to one another.

From time to time, the ASR Counterparty and/or its respective affiliates have directly and indirectly engaged, and may engage in the future, in investment and/or commercial banking transactions with the Company for which the ASR Counterparty (or its affiliates) has received, or may receive, customary compensation, fees and expense reimbursement.

The foregoing description of the ASR Agreement does not purport to be complete and is qualified in its entirety by reference to the form of confirmation for the ASR Agreement, a copy of which form is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000109177/000010917723000032/spb-20230616.htm