Hewlett Packard Enterprise Raises $1.35 Billion Through Convertible Stock Offering for Juniper Networks Acquisition

HPE prices $1.35B preferred stock at $50 per share (NYSE:HPE)

Hewlett Packard Enterprise (NYSE:HPE) priced its public offering of $1.35B(27 million shares) of Series C Mandatory Convertible Preferred Stock of HPE at a price to the public and a liquidation preference of $50.00 per share of preferred stock. Underwriters have a 30-day option to purchase up to an additional $150M (3M shares) of preferred stock to cover over-allotments. The proceeds will be ~$1.32B or ~$1.46B if the underwriters exercise their option. The net proceeds will be used to fund all or a portion of the consideration for the previously announced pending acquisition of Juniper Networks, to pay related fees and expenses, and, if any proceeds remain thereafter, for other general corporate purposes. The offering is expected to be consummated on or about September 13, 2024. More on Hewlett Packard Hewlett Packard Enterprise: Q3, Low AI Server Margin Is Not An Issue Hewlett Packard Enterprise announces proposed public offering of mandatory convertible preferred stock

HPE announces proposed public offering of mandatory convertible preferred stock

Hewlett Packard Enterprise Company (NYSE:HPE) on Monday said it has commenced an offering of $1.35 billion of Series C mandatory convertible preferred stock in an underwritten registered public offering. HPE expects to grant the underwriters in the offering a 30-day option to purchase up to an additional $150 million of preferred stock to cover over-allotments, if any. HPE intends to use the net proceeds from the offering to fund all or a portion of the consideration for the previously announced pending acquisition of Juniper Networks, to pay related fees and expenses, and, if any proceeds remain thereafter, for other general corporate purposes. Each share of preferred stock will have a liquidation preference of $50.00 per share. HPE -3.52% after hours to $16.98. Source: Press Release More on Hewlett Packard Hewlett Packard Enterprise: Q3, Low AI Server Margin Is Not An Issue 3 out of 5 companies miss revenue estimates this week - Earnings Scorecard HPE boosts AI server sales while international markets lags

Hewlett Packard shares fall on $1.35 billion convertible stock offering for Juniper buyout

(Reuters) - Hewlett Packard Enterprise's shares dropped 6.4% in extended trading after the AI server maker announced a $1.35 billion mandatory convertible preferred stock offering to fund its acquisition of Juniper Networks. Earlier this year, HPE said it would acquire the networking equipment manufacturer for $14 billion in an all-cash deal, in an attempt to enhance the company's AI offerings. HPE said net proceeds from the offering will be used to cover fees and expenses related to the pending acquisition. A convertible preferred stock offering allows investors to buy preferred shares, which often fetch higher dividends than common shares. Investors also have the option to convert their preferred stocks into common shares. The preferred stock offered by HPE will automatically convert into a number of common shares around Sept. 1, 2027, unless it has been redeemed or converted previously. Investment banks Citigroup, J.P. Morgan and Mizuho will act as joint book-running managers for the offering, the company said. Last week, HPE raised its annual profit forecast, citing increased demand for AI servers driven by higher enterprise spending on AI infrastructure. (Reporting by Harshita Mary Varghese in Bengaluru)

Hewlett Packard shares fall on $1.35 billion convertible stock offering for Juniper buyout

HPE said net proceeds from the offering will be used to cover fees and expenses related to the pending acquisition. A convertible preferred stock offering allows investors to buy preferred shares, which often fetch higher dividends than common shares. Investors also have the option to convert their preferred stocks into common shares. The preferred stock offered by HPE will automatically convert into a number of common shares around Sept. 1, 2027, unless it has been redeemed or converted previously. Investment banks Citigroup, J.P. Morgan and Mizuho will act as joint book-running managers for the offering, the company said. Last week, HPE raised its annual profit forecast, citing increased demand for AI servers driven by higher enterprise spending on AI infrastructure. (Reporting by Harshita Mary Varghese in Bengaluru)

Hewlett Packard Enterprise Stock Is Dropping Today. Here's Why.

HPE shares fell Tuesday, dropping into negative territory for 2024. Hewlett Packard Enterprise (HPE) shares suffered the steepest daily loss of any stock in the S&P 500 on Tuesday, plunging more than 7% after the provider of enterprise technology solutions announced a $1.5 billion convertible stock offering. According to a filing with the Securities and Exchange Commission (SEC), HPE plans to use the proceeds from the offering -- of 27 million shares of mandatory convertible preferred stock -- to cover fees and expenses related to its acquisition of the networking equipment maker Juniper Networks (JNPR). HPE in January said it would purchase Juniper in an all-cash deal worth around $14 billion, aiming to and improve its position in artificial intelligence (AI) networking markets. The offering of additional shares often causes downward pressure on stock prices because it results in dilution -- a reduction in the value of the shares held by existing investors as their proportional ownership in the company diminishes. In this transaction, Hewlett Packard Enterprise is offering preferred shares, a class of stock that provides priority dividend payouts compared with common shares. Preferred shareholders also have the option to convert their holdings into common stock. The preferred shares offered by Hewlett Packard Enterprise will automatically convert to common stock around Sept. 1, 2027 unless shareholders redeem or convert their shares prior to that date. In its most recent earnings report, released Sept. 4, Hewlett Packard Enterprise posted better-than-expected sales. An increase in server revenue, boosted by AI demand, helped drive the performance. However, diluted earnings per share (EPS) fell shy of forecasts, and the stock has been trending downward in the week following the release. Following Tuesday's losses, HPE shares fell into negative territory for 2024, currently down around 4% year to date.