PROG Holdings, Inc., the fintech holding company for Progressive Leasing, Vive Financial, and Four Technologies, announced the commencement of a “modified Dutch auction” tender offer (the “Tender Offer”) to purchase for cash up to $425 million in value of shares of its common stock, par value $0.50 per share (the “Shares”), or such lesser amount of the Shares as are properly tendered and not properly withdrawn, at a single per Share price of not less than $44.00 per share and not more than $50.00 per share, less any applicable withholding taxes and without interest.
A “modified Dutch auction” tender offer allows shareholders to indicate how many Shares and at what price within the range described above they wish to tender their Shares. Based on the number of Shares tendered and the prices specified by the tendering shareholders, PROG Holdings will determine the lowest price per Share within the specified range that will enable PROG Holdings to purchase Shares having an aggregate purchase price of $425 million, or such lesser amount of Shares that are properly tendered and not properly withdrawn prior to the expiration date of the tender offer. If Shares having an aggregate purchase price of more than $425 million are tendered in the Tender Offer, PROG Holdings reserves the right to accept for purchase at the purchase price pursuant to the Tender Offer up to an additional 2% of its outstanding Shares without amending or extending the Tender Offer. PROG Holdings also expressly reserves the right, in its sole discretion, to purchase additional Shares subject to applicable legal and regulatory requirements.
The Tender Offer is made in accordance with the terms and subject to the conditions described in the Offer to Purchase, dated November 4, 2021 (the “Offer to Purchase”), and the accompanying Letter of Transmittal, dated November 4, 2021 (together with the Offer to Purchase and the other materials filed as exhibits to the Schedule TO (as defined below), the “Offer Materials”), as each may be amended or supplemented from time to time. The Tender Offer will expire at 12:00 midnight, New York City time, at the end of the day on December 3, 2021 (the “Expiration Date”), unless the Tender Offer is extended or earlier terminated. Tenders of Shares must be made on or prior to the Expiration Date and may be withdrawn at any time prior to the Expiration Date in accordance with the procedures described in the Offer Materials.
PROG Holdings believes that the Tender Offer is consistent with its capital allocation strategy, which includes as one of its primary objectives returning capital to its shareholders. The Tender Offer is being launched as part of a newly authorized $1 billion share repurchase program, which replaces PROG Holdings’ prior $300 million program. The tender offer procedure was selected by PROG Holdings, in part, because it provides its shareholders with the opportunity to tender all or a portion of their Shares, and thereby receive a return of some or all of their investment in PROG Holdings, if they so elect.
The Tender Offer is not contingent upon the receipt of any minimum number of Shares being tendered. However, the Tender Offer is subject to a number of other terms and conditions, which are described in detail in the Offer to Purchase, including the consummation by PROG Holdings of a new debt financing prior to the Expiration Date on terms reasonably satisfactory to PROG Holdings and resulting in gross proceeds to PROG Holdings of at least $400 million. PROG Holdings expects to fund the purchase of the Shares tendered in the Tender Offer, and to pay related fees and expenses, with the proceeds of the new debt financing, together with cash on hand and/or borrowings under PROG Holdings’ existing revolving facility.
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The Offer Materials have concurrently been mailed to record holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies, or other nominee shareholders and similar persons whose names, or the names of whose nominees, appear on the PROG Holdings’ shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of the Shares. The Offer Materials contain important information that holders are urged to read before any decision is made with respect to the Tender Offer.
While PROG Holdings’ Board of Directors has authorized PROG Holdings to make the Tender Offer, none of PROG Holdings, its Board of Directors, the dealer manager, the information agent or the depositary makes any recommendation as to whether any shareholder should participate or refrain from participating in the Tender Offer or as to the purchase price or purchase prices at which shareholders may choose to tender their Shares in the Tender Offer. PROG Holdings has not authorized any person to make any such recommendation. Shareholders must decide whether to tender their Shares and, if so, how many Shares to tender and at what price or prices to tender. In doing so, shareholders should carefully evaluate all of the information in the Offer Materials before making any decision with respect to the Tender Offer, and should consult their own broker or other financial, legal and tax advisors.
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