Take-Two announced the sale of $2.7 billion worth of bonds. The proceeds will be part of the amount that the company plans to pay for the purchase of the Zynga mobile publisher.
It plans to sell 14.5% of securities (senior bonds) as part of a public offering through underwriters. But they will go in packages at different prices. The latter depends on the maturity of their repayment.
For understanding, senior bonds (which Take-Two exposes) are a type of bonds that give an investor an advantage over other holders of securities in the right to receive part of the company’s assets in the event of its bankruptcy.
As for the maturity dates,:
- 3.3% of bonds with a payment date until 2024 will cost buyers $1 billion;
- 3.5% of the bonds with a payment date until 2025 will cost $600 million;
- 3.7% of bonds with a payment date until 2027 will cost $600 million;
- 4% of the bonds with a payment date until 2032 will cost $500 million.
All packages will be put up for auction on April 14 through financial holdings JP Morgan Securities, Wells Fargo Securities, BNP Paribas Securities and BofA Securities.
The proceeds from the sale of bonds, together with cash, will be used by the company, as we noted a little above, to finance the acquisition of Zynga.
By the way, if the deal to acquire the mobile giant is not completed by January 9, 2023, or is canceled before that date, then Take-Two will have to buy back its bonds.
Recall that Take-Two agreed to purchase Zynga in January of this year. The total value of the transaction is $12.7 billion. This is one of the largest mergers in the industry. It is second only to Microsoft‘s acquisition of Activision Blizzard for $68.7 billion.