CHARLOTTE, N.C., Nov. 17 /PRNewswire-FirstCall/ -- Sonic Automotive, Inc.
(NYSE: SAH) today announced that, subject to market and other conditions, it
plans to offer $150 million aggregate principal amount of convertible senior
subordinated notes due 2015 (the "Notes") in a registered public offering.
Sonic expects to grant the underwriters a 13-day option to purchase up to an
additional $10 million aggregate principal amount of Notes solely to cover
over allotments. The Notes will bear interest at a fixed rate and will be
convertible into cash and shares, if any, of Sonic's Class A common stock.
The Notes may be redeemed by Sonic on or after November 30, 2010. Holders of
Notes may require Sonic to repurchase their Notes on November 30, 2010 and
upon the occurrence of certain circumstances.
Sonic intends to use the net proceeds from the offering to repay a portion
of the amounts outstanding under its revolving credit facility, which may be
reborrowed, and utilized for general corporate purposes, including
acquisitions. Additionally, Sonic intends to use a portion of the net
proceeds to pay the net cost of a convertible note hedge and warrant
transaction with affiliates of certain of the underwriters in connection with
the offering, which is expected to reduce the potential dilution to Sonic's
common stock from the conversion of the Notes and to have the effect to Sonic
of increasing the conversion price of the Notes. Sonic has been advised by
the counterparties to the convertible note hedge and warrant transaction that
the counterparties expect to enter into various derivative transactions at or
shortly after the pricing of the offering of the Notes and may unwind such
derivative transactions, enter into other derivative transactions and may
purchase and sell shares of Class A common stock in secondary market
transactions following the pricing of the Notes (including during any cash
settlement averaging period relating to the Notes).
Sonic will file today with the Securities and Exchange Commission a
preliminary prospectus supplement to its effective shelf registration
statement. The proposed offering will be made only by means of that
preliminary prospectus supplement and the related prospectus. This release is
not an offer to sell or the solicitation of an offer to buy nor shall there be
any sale 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.
The joint bookrunners for this offering will be Banc of America Securities
LLC, J.P. Morgan Securities Inc. and Merrill Lynch & Co. When available,
copies of the preliminary prospectus supplement relating to the Notes may be
obtained by contacting Banc of America Securities LLC, Capital Markets
Operations (Prospectus Fulfillment), 100 West 33rd Street, New York, NY 10001;
J.P. Morgan Securities Inc., Prospectus Department, 277 Park Avenue, New York,
NY 10172; or Merrill Lynch & Co., 4 World Financial Center, New York, New York
10080.
Included herein are forward-looking statements pertaining to completion of
the proposed transactions on the terms described above. There are many
factors that affect management's views about future events and trends of
Sonic's business. These factors involve risks and uncertainties that could
cause actual results or trends to differ materially from management's view,
including without limitation, economic conditions, risks associated with
acquisitions and risk factors described in Exhibit 99.2 to Sonic's Current
Report on Form 8-K dated November 3, 2005. Sonic does not undertake any
obligation to update forward-looking information.
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is
one of the largest automotive retailers in the United States operating 174
franchises and 38 collision repair centers. Sonic can be reached on the Web
at http://www.sonicautomotive.com.
SOURCE Sonic Automotive, Inc.
 back to top
Related links:
http://www.sonicautomotive.com
CONTACT:
Jeffrey C. Rachor, President and Chief
Operating Officer, +1-704-566-2400, or J. Todd Atenhan, Investor
Relations, +1-888-766-4218, both of Sonic Automotive, Inc.
|
