Vivid Seats Stock Rebounds After Buyback Plan Announced Vivid Seats Stock Rebounds After Buyback Plan Announced
Vivid Seats shares (NASDAQ: SEAT) have surged after a lengthy slide, rebounding briefly to above $9 per share Thursday after news its Board of... Vivid Seats Stock Rebounds After Buyback Plan Announced

Vivid Seats shares (NASDAQ: SEAT) have surged after a lengthy slide, rebounding briefly to above $9 per share Thursday after news its Board of Directors had authorized plans to buy back up to $40 million in outstanding stock. Prior to the announcement, share prices had been slumping, reaching as low as $7.02 as the market pushed prices down across the board.

In its announcement of the buyback plan, released Thursday morning, Vivid Seats indicated its buyback offer was designed to “simplify the Company’s capital structure and reduce the potential dilutive impact of the warrants, thereby providing the Company with more flexibility for financing its operations in the future,” and would be funded by cash from operations and cash on hand.

“We are committed to strategically deploying capital to drive long-term value for shareholders. Our technology marketplace has a long track record of growth, profitability and strong cash flow conversion that enables us to selectively repurchase shares. The share repurchase program underscores our confidence in continued cash flow generation,” said Lawrence Fey, Vivid Seats CFO.

On industry source suggested to TicketNews that the decision was likely based on company leadership viewing the current share price on the market to be undervalued, allowing the company to buy them back at a discount relative to their long-term value.

vivid SEats stock price trend

The full announcement and details are available below:

Vivid Seats Announces Exchange Offer and Consent Solicitation Relating to Public Warrants and Authorization of $40 Million Share Repurchase Program

Vivid Seats Inc. (NASDAQ: SEAT) (“Vivid Seats” or the “Company”), a leading marketplace that utilizes its technology platform to connect millions of buyers with thousands of ticket sellers across hundreds of thousands of events each year, today announced that it has commenced an exchange offer (the “Offer”) and consent solicitation (the “Consent Solicitation”) relating to its outstanding public warrants to purchase shares of its Class A common stock, par value $0.0001 per share (“Class A Common Stock”). The purpose of the Offer and Consent Solicitation is to simplify the Company’s capital structure and reduce the potential dilutive impact of the warrants, thereby providing the Company with more flexibility for financing its operations in the future. Vivid Seats also announced that its Board of Directors has authorized the repurchase of up to $40 million of the Company’s outstanding shares of its Class A Common Stock following the completion of the Offer and Consent Solicitation and until the end of March 2023. The Company intends to fund the share repurchase program with cash from operations and cash on hand. No share repurchases will be made under the share repurchase program until the Offer is complete.

“We are committed to strategically deploying capital to drive long-term value for shareholders. Our technology marketplace has a long track record of growth, profitability and strong cash flow conversion that enables us to selectively repurchase shares. The share repurchase program underscores our confidence in continued cash flow generation,” said Lawrence Fey, Vivid Seats CFO.

Exchange Offer and Consent Solicitation Relating to Public Warrants

The Company is offering to all holders of its public warrants the opportunity to receive 0.240 shares of Class A Common Stock in exchange for each outstanding public warrant tendered by the holder and exchanged pursuant to the Offer. Pursuant to the Offer, the Company is offering up to an aggregate of 4,351,864 shares of its Class A Common Stock in exchange for the public warrants.

Concurrently with the Offer, the Company is also soliciting consents from holders of the public warrants to amend the warrant agreement that governs all of the public warrants (the “Warrant Agreement”) to permit the Company to require that each public warrant that is outstanding upon the closing of the Offer be converted into 0.213 shares of Class A Common Stock, which is a ratio 12.7% less than the exchange ratio applicable to the Offer (such amendment, the “Warrant Amendment”). Pursuant to the terms of the Warrant Agreement, all except certain specified modifications or amendments require the vote or written consent of holders of at least 65% of the outstanding public warrants. Accordingly, the adoption of the Warrant Amendment will require the consent of holders of at least 65% of the outstanding public warrants. Eldridge Industries, LLC, which holds approximately 28.5% of the outstanding public warrants, has agreed to tender its public warrants in the Offer and to consent to the Warrant Amendment in the Consent Solicitation pursuant to a tender and support agreement. Accordingly, if holders of an additional approximately 36.5% of the outstanding public warrants consent to the Warrant Amendment in the Consent Solicitation, and the other conditions of the Offer are satisfied or waived, then the Warrant Amendment will be adopted. The offering period will continue until 11:59 p.m., Eastern Daylight Time, on June 29, 2022, or such later time and date to which the Company may extend, as described in the Company’s Schedule TO and Prospectus/Offer to Exchange (the “Expiration Date”). Tendered warrants may be withdrawn by holders at any time prior to the Expiration Date.

The Offer and Consent Solicitation are being made pursuant to a Prospectus/Offer to Exchange dated May 26, 2022, and Schedule TO, dated May 26, 2022, each of which have been filed with the U.S. Securities and Exchange Commission (the “SEC”) and more fully set forth the terms and conditions of the Offer and Consent Solicitation.

The Company’s Class A Common Stock and public warrants are listed on The Nasdaq Global Select Market under the symbols “SEAT” and “SEATW,” respectively. As of May 23, 2022, a total of 18,132,766 public warrants were outstanding.

The Company has engaged Evercore Group L.L.C. as the Dealer Manager for the Offer and Consent Solicitation. Any questions or requests for assistance concerning the Offer and Consent Solicitation may be directed to Evercore Group L.L.C. at (888) 474-0200 (toll-free). D.F. King & Co., Inc. has been appointed as the Information Agent for the Offer and Consent Solicitation, and Continental Stock Transfer & Trust Company has been appointed as the Exchange Agent. Requests for documents should be directed to D.F. King & Co., Inc. at (800) 549-6864 (for warrant holders) or (212) 269-5550 (for banks and brokers) or via the following email address: [email protected]

Share Repurchase Program

Following the completion of the Offer and Consent Solicitation (or termination thereof if it is not completed), and until March 31, 2023, the Company may repurchase shares from time to time in open market transactions, through privately negotiated transactions or otherwise in accordance with applicable federal securities laws. The timing and amounts of any purchases under the share repurchase program will be based on market conditions and other factors including price. The share repurchase program may be suspended or discontinued at any time, and does not obligate the Company to repurchase any dollar amount or particular amount of shares.

Important Additional Information Has Been Filed with the SEC

Copies of the Schedule TO and Prospectus/Offer to Exchange will be available free of charge at the website of the SEC at www.sec.gov. Requests for documents may also be directed to Evercore Group L.L.C. at (888) 474-0200 (toll-free). A registration statement on Form S-4 relating to the securities to be issued in the Offer has been filed with the SEC but has not yet become effective. Such securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

This announcement is for informational purposes only and shall not constitute an offer to purchase or a solicitation of an offer to sell the warrants or an offer to sell or a solicitation of an offer to buy any shares of common stock in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. The Offer and Consent Solicitation are being made only through the Schedule TO and Prospectus/Offer to Exchange, and the complete terms and conditions of the Offer and Consent Solicitation are set forth in the Schedule TO and Prospectus/Offer to Exchange.

Holders of the public warrants are urged to read the Schedule TO and Prospectus/Offer to Exchange carefully before making any decision with respect to the Offer and Consent Solicitation because they contain important information, including the various terms of, and conditions to, the Offer and Consent Solicitation.

None of the Company, any of its management or board of directors or the Information Agent, the Exchange Agent or the Dealer Manager makes any recommendation as to whether or not holders of public warrants should tender warrants for exchange in the Offer or consent to the Warrant Amendment in the Consent Solicitation.

Last Updated on May 27, 2022 by Dave Clark

No comments so far.

Be first to leave comment below.

Your email address will not be published.