UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 3)
PROG HOLDINGS, INC.
(Name of Subject Company (Issuer))
PROG HOLDINGS, INC., AS ISSUER
(Name of Filing Persons (Identifying status as offeror, issuer, or other person))
Common stock, par value $0.50 per share
(Title of Class of Securities)
74319R101
(CUSIP Number of Class of Securities)
Brian Garner
Chief Financial Officer
c/o PROG Holdings, Inc.
256 W. Data Drive
Draper, UT 84020
Telephone: (385) 351-1369
(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing person)
Copies to:
William C. Smith, III
Michael S. Hamilton
King & Spalding LLP
1180 Peachtree Street, NE
Suite 1600
Atlanta, GA 30309
(404) 572-4875
Marisa D. Stavenas
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
(212) 455-2000
CALCULATION OF FILING FEE
| Transaction Valuation(1) | Amount of Filing Fee(2) | |
| $425,000,000.00 | $39,397.50 |
| (1) | Calculated solely for purposes of determining the amount of the filing fee. This amount is based on the offer to purchase up to $425,000,000 in value of shares of common stock, par value $0.50 per share, of PROG Holdings, Inc. |
| (2) | The amount of the filing fee, calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for fiscal year 2022 equals $92.70 per million dollars of the transaction. |
| ☒ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: $39,397.50 | Filing Party: PROG Holdings, Inc. | |
| Form or Registration No: Schedule TO | Date Filed: November 4, 2021 |
| ☐ | Check the box if filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: |
| ☐ | third-party tender offer subject to Rule 14d-1. |
| ☒ | issuer tender offer subject to Rule 13e-4. |
| ☐ | going-private transaction subject to Rule 13e-3. |
| ☐ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer: ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
| ☐ | Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
| ☐ | Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
This Amendment No. 3 (the “Amendment No. 3”) amends and supplements the Tender Offer Statement on Schedule TO-I filed with the Securities and Exchange Commission (“SEC”) by PROG Holdings, Inc., a Georgia corporation (the “Company”), on November 4, 2021, as amended and supplemented on November 8, 2021 and November 10, 2021 (as amended and supplemented, the “Schedule TO”) in connection with the offer by the Company to purchase for cash up to $425,000,000 in value of shares of its common stock, par value $0.50 per share (the “Common Stock”), at a price not less than $44.00 per share and not more than $50.00 per share, less any applicable withholding taxes and without interest. The Company’s offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 4, 2021 (as it may be amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal,” and together with the Offer to Purchase, the “Offer”). Copies of the Offer to Purchase and Letter of Transmittal were filed with the Schedule TO as Exhibits (a)(1)(i) and (a)(1)(ii), respectively.
Only those items amended or supplemented are reported in this Amendment No. 3. Except as specifically provided herein, the information contained in the Schedule TO remains unchanged and this Amendment No. 3 does not modify any of the information previously reported on the Schedule TO. All capitalized terms in this Amendment No. 3 and not otherwise defined have the respective meanings ascribed to them in the Schedule TO. You should read this Amendment No. 3 together with the Schedule TO, the Offer to Purchase and the related Letter of Transmittal.
| ITEM 7. | Source and Amount of Funds or Other Consideration. |
Item 7(a), (b) and (d) are hereby amended and supplemented by the following information:
On November 26, 2021, the Company announced the consummation of its previously announced offering of $600 million in aggregate principal amount of its 6.000% Senior Notes due 2029 (the “New Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons in accordance with Regulation S under the Securities Act (the “New Notes Offering”). The New Notes are general unsecured obligations of the Company and will be guaranteed by certain of the Company’s existing and future domestic subsidiaries.
The New Notes were issued at 100% of par value and mature on November 15, 2029. Interest on the New Notes is payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2022.
The net proceeds from the offering of the New Notes will be used to fund the purchase price, and related fees and expenses, of the Offer. The Company intends to use any remaining proceeds for future additional share repurchases or, to the extent the Company determines not to repurchase additional shares, for general corporate purposes. Consummation of the New Notes Offering satisfied the Financing Condition (as defined in the Offer to Purchase).
The indenture governing the New Notes (the “Indenture”), provides that, within sixty days of November 26, 2021, to the extent the Offer is not fully subscribed, the Company may use an amount not greater than the value of the shares of Common Stock subject to the Offer that have not been tendered pursuant to such offer to redeem up to $200 million aggregate principal amount of the New Notes at a redemption price of 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The New Notes will also be redeemable, in whole or in part, at any time or from time to time on or after November 15, 2024, at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time and from time to time prior to November 15, 2024, the New Notes may be redeemed, in whole or in part, at a redemption price of 100% of the principal amount thereof, plus a “make-whole premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, the Company may redeem up to 40% of the New Notes at any time or from time to time before November 15, 2024, with the proceeds from certain equity offerings at a redemption price equal to 106.000%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Upon the occurrence of a Change of Control (as defined in the Indenture), each holder has the right to require the Company to offer to repurchase all or any part of such holder’s New Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
| ITEM 11. | Additional Information. |
Item 11 is hereby amended and supplemented by adding the following information:
On November 26, 2021, the Company issued a press release relating to the consummation of the New Notes Offering and the satisfaction of the Financing Condition. A copy of the press release is filed with this Amendment No. 3 as Exhibit (a)(5)(xviii) and incorporated herein by reference.
| ITEM 12. | Exhibits. |
Item 12 is hereby amended and supplemented to add the following:
| (a)(5)(vii) |
| (a)(5)(viii) |
| (a)(5)(ix) |
| (a)(5)(x) |
| (a)(5)(xi) |
| (a)(5)(xii) |
| (a)(5)(xiii) |
| (a)(5)(xiv) |
| (a)(5)(xv) |
| (a)(5)(xvi) |
| (a)(5)(xvii) |
| (a)(5)(xviii) |
| (b)(2) |
| (b)(3) |
Offer to Purchase (Exhibit (a)(1)(i) to the Schedule TO)
The Offer to Purchase is hereby restated and supplemented as follows:
Cover
THE TENDER OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE TENDER OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS, INCLUDING THE CONSUMMATION BY US OF A NEW DEBT FINANCING (THE “DEBT FINANCING”) PRIOR TO THE EXPIRATION DATE ON TERMS REASONABLY SATISFACTORY TO US AND RESULTING IN GROSS PROCEEDS TO US OF AT LEAST $400 MILLION (THE “FINANCING CONDITION”). ON NOVEMBER 10, 2021, THE COMPANY ANNOUNCED THAT IT HAD PRICED AN OFFERING OF $600 MILLION OF 6.000% SENIOR NOTES DUE 2029 (THE “NEW NOTES”) IN A PRIVATE PLACEMENT TO PERSONS REASONABLY BELIEVED TO BE QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND TO NON-U.S. PERSONS IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (THE “NEW NOTES OFFERING”). ON NOVEMBER 26, 2021, THE COMPANY ANNOUNCED THE CONSUMMATION OF THE NEW NOTES OFFERING, SATISFYING THE FINANCING CONDITION. SEE SECTION 7.
Summary Term Sheet – How many shares will the Company purchase?; Introduction
The tender offer is not conditioned on any minimum number of shares being tendered. The tender offer is, however, subject to other conditions, including the Financing Condition. On November 10, 2021, the Company announced that it had priced the New Notes Offering. On November 26, 2021, the Company announced that it had consummated the New Notes Offering, satisfying the Financing Condition. See Section 7.
Section 1 – Number of Shares; Proration
THE TENDER OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE TENDER OFFER IS, HOWEVER, SUBJECT TO OTHER CONDITIONS, INCLUDING THE FINANCING CONDITION. ON NOVEMBER 10, 2021, THE COMPANY ANNOUNCED THAT IT HAD PRICED THE NEW NOTES OFFERING. ON NOVEMBER 26, 2021, THE COMPANY ANNOUNCED THAT IT HAD CONSUMMATED THE NEW NOTES OFFERING, SATISFYING THE FINANCING CONDITION. SEE SECTION 7.
Section 7 – Conditions of the Offer
On November 10, 2021, the Company announced that it had priced the New Notes Offering. On November 26, 2021, the Company announced that it had consummated the New Notes Offering, satisfying the Financing Condition.
Section 9 – Source and Amount of Funds
On November 10, 2021, the Company announced that it had priced the New Notes Offering. On November 26, 2021, the Company announced that it had consummated the New Notes Offering, satisfying the Financing Condition. The Company expects to use the net proceeds from the offering of the New Notes to fund the purchase of the shares tendered in the tender offer, and to pay related fees and expenses. The Company intends to use any remaining proceeds for future additional share repurchases or, to the extent the Company determines not to repurchase additional shares, for general corporate purposes.
6.000% Senior Notes due 2029. On November 26, 2021, the Company issued $600 million in aggregate principal amount of the New Notes pursuant to the New Notes Offering. The New Notes are general unsecured obligations of the Company and will be guaranteed by certain of the Company’s existing and future domestic subsidiaries.
The New Notes were issued at 100% of par value and mature on November 15, 2029. Interest on the New Notes is payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2022.
The indenture governing the New Notes (the “Indenture”), provides that, within sixty days of November 26, 2021, to the extent the tender offer is not fully subscribed, the Company may use an amount not greater than the value of the shares subject to the tender offer that have not been tendered pursuant to such offer to redeem up to $200 million aggregate principal amount of the New Notes at a redemption price of 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The New Notes will also be redeemable, in whole or in part, at any time or from time to time on or after November 15, 2024, at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time and from time to time prior to November 15, 2024, the New Notes may be redeemed, in whole or in part, at a redemption price of 100% of the principal amount thereof, plus a “make-whole premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, the Company may redeem up to 40% of the New Notes at any time or from time to time before November 15, 2024, with the proceeds from certain equity offerings at a redemption price equal to 106.000%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Upon the occurrence of a Change of Control (as defined in the Indenture), each holder has the right to require the Company to offer to repurchase all or any part of such holder’s New Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
The foregoing description is a summary of the material terms of the Indenture, a copy of which has been filed as an exhibit to the Schedule TO-I to which this Offer to Purchase is an exhibit.
Section 10 – Certain Information Concerning Us
| Commission Filings | Date Filed | |
| Annual Report on Form 10-K for the fiscal year ended December 31, 2020 | February 26, 2021 | |
| Amendment No. 1 to Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020 | April 29, 2021 | |
| Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 | April 29, 2021, July 29, 2021 and November 3, 2021 | |
| Current Reports on Form 8-K | May 11, 2021, June 28, 2021, September 10, 2021, November 4, 2021, November 8, 2021 (Item 8.01 only), November 10, 2021 and November 26, 2021 | |
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| PROG HOLDINGS, INC. | ||
| By: | /s/ Brian Garner | |
| Brian Garner | ||
| Chief Financial Officer | ||
Date: November 26, 2021
EXHIBIT INDEX
| * | Previously filed. |