NEW BRITAIN, Conn., March 13 /PRNewswire-FirstCall/ -- The Stanley Works ("Stanley") announced today its intention to offer to sell, subject to market and other conditions, $200 million aggregate principal amount of unsecured notes due 2010 and Equity Units consisting of $300 million aggregate principal amount of convertible notes due 2012 and contracts to purchase a variable number of shares of common stock in 2010. The offerings will be made pursuant to an effective registration statement filed with the Securities and Exchange Commission. The convertible notes will be convertible into shares of common stock at a conversion price that will represent a premium of between 15% and 20% above the current market price. Stanley expects to grant to the underwriters an option to purchase additional Equity Units to cover overallotments.
Stanley intends to use proceeds from the offerings to repay amounts outstanding under its revolving credit facility, extendible commercial notes program and commercial paper borrowings The bridge facility, put in place in January 2007 for temporary financing of Stanley's acquisition of HSM Protection Services, Inc., will, as previously disclosed, be terminated upon closing of these transactions. In an effort to reduce potential dilution of Stanley's common stock upon conversion of the convertible notes, Stanley also intends to use a portion of the net proceeds of the Equity Units offering to enter into convertible note hedge and warrant transactions with counterparties which will be affiliates of the underwriters. These counterparties have advised Stanley that they expect to enter into various derivative transactions with respect to Stanley's common stock concurrently with, or shortly after, the pricing of the convertible notes. Through these transactions the Stanley expects to effectively increase the conversion premium on the convertible notes from the 15% to 20% range to a 50% -60% range.
Goldman, Sachs & Co. and UBS Securities LLC are acting as joint book-running managers of the notes offering. Citigroup Global Markets Inc., Morgan Stanley & Co. and Bank of America Securities LLC are acting as joint book-running managers of the Equity Units offering.
This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Copies of the preliminary prospectus for the offerings may be obtained from Citigroup Global Markets Inc., Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220, Tel: 718-765-6732, Fax: 718-765-6734; or Morgan Stanley & Co. Incorporated, Attention Prospectus Department, 180 Varick Street, New York NY 10014; or Goldman, Sachs & Co., Attention Prospectus department, 85 Broad Street, New York, New York 1004, Fax: 212-902-9316 or via e-mail at
The Stanley Works is a worldwide supplier of hand tools, storage and pneumatic tools for construction and DIY markets; a worldwide supplier of industrial & automotive tools and engineered solutions for professional and industrial use; and a North American provider of convergent and mechanical security solutions for commercial use.
This press release contains statements that constitute "forward-looking statements," including with regard to Stanley's planned securities offerings, the anticipated use of the net proceeds, and the expected results of the convertible note hedge and warrant transactions concerning reducing potential dilution and effectively increasing the conversion premium from the 15% to 20% range to a 50% -60% range. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. No assurance can be given that the offerings will be consummated on the terms described above or at all. Consummation of the offerings and the terms thereof are subject to numerous conditions, many of which are beyond the control of Stanley, including: the prevailing conditions in the public capital markets; interest rates; economic, political and market factors affecting trading volumes, securities prices or demand for Stanley's stock; and other factors, including those set forth in the Risk factors section of Stanley's Annual Report on Form 10-K. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
