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SANFORD, N.C. -- The Pantry Inc. announced the pricing of a public offering of 5 million shares of its common stock at $22.96 per share. In the offering, 1.5 million shares are being offered by Pierce, Fenner & Smith Inc., an affiliate of Merrill Lynch, (the "forward purchaser") in connection with a forward sale agreement. The remaining 3.5 million shares are being offered by investment funds affiliated with Freeman Spogli & Co., which also has granted an option to the underwriters to purchase up to an additional 750,000 shares to cover over-allotments, if any.
The offering is being made under the company's current shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, The Pantry entered into a forward sale agreement with the forward purchaser, under which the forward purchaser agreed to borrow and sell 1.5 million shares of the company's common stock. The forward sale agreement will settle in 12 months, or earlier at the company's option.
The company has the option to physically settle the forward sale agreement by delivering shares of common stock and receiving the full proceeds. If the company elected to physically settle all of the 1.5 million shares subject to the forward sale agreement with stock at the end of 12 months, it would receive net proceeds of approximately $32.8 million. The company also has the option to net stock settle or net cash settle the forward sale agreement. The Pantry intends to physically settle the forward sale agreement within 12 months and use the proceeds to finance potential acquisitions and for general corporate purposes.
Merrill Lynch & Co. is serving as sole book-running manager for the offering, with Goldman, Sachs & Co. acting as co-lead manager. William Blair & Co., Jefferies & Co. Inc. and Morgan Keegan & Co. Inc. are serving as co-managers.