AUBURN HILLS, Mich. - BorgWarner Inc. (NYSE: NYSE:BWA), a global product leader in mobility solutions, announced today the pricing for its cash tender offers to purchase any and all of its outstanding 3.375% and 5.000% Senior Notes due in 2025. The offers, which were initially made public on August 7, 2024, have not seen changes to their terms and conditions.
The company has listed the 3.375% Senior Notes at a purchase price of $992.38 per $1,000 principal amount and the 5.000% Senior Notes at $1,006.66 per $1,000 principal amount. These prices were determined based on the reference yields of corresponding U.S. Treasury Securities as of 10:00 a.m., New York City time, today.
Investors holding these notes must tender them before the expiration time of 5:00 p.m., New York City time, today, to be eligible for the tender offer consideration. BorgWarner has stated that the settlement date for the tender offers is expected to be August 16, 2024.
The company has clarified that the completion of the tender offers is contingent upon certain conditions, including a financing condition. However, there is no minimum tender condition attached to the offers. Detailed instructions and terms for the tendering process are available in the Tender Offer Documents.
BofA Securities, Inc., Citigroup Global Markets Inc., and Wells Fargo Securities, LLC are acting as the dealer managers for the tender offers. Global Bondholder Services Corporation has been appointed as the tender and information agent.
BorgWarner has been at the forefront of automotive innovation for over a century, focusing on eMobility and the development of environmentally friendly mobility solutions. The company's forward-looking statements indicate a continued commitment to innovation and market expansion, despite the inherent risks associated with the automotive industry's cyclical nature and rapid technological advancements.
This news is based solely on a press release statement and does not constitute an offer to sell or a solicitation to buy securities. The tender offers are only valid in jurisdictions where they are legally permitted.
In other recent news, automotive supplier BorgWarner Inc. has reported robust Q2 financial results with sales reaching $3.6 billion. The company has also initiated significant restructuring within its ePropulsion segment, with an aim to save around $100 million annually by 2026. Despite lowering its total sales projections for 2024, BorgWarner has increased its full-year margin outlook and expressed plans to repurchase $300 million of its stock in the latter half of the year.
BorgWarner has also announced the issuance of $1 billion in senior notes. These notes, offered under an underwriting agreement with BofA Securities, Inc., Citigroup Global Markets Inc., and Wells Fargo Securities, LLC, are expected to be used to repurchase existing senior notes due in 2025. The company has also launched tender offers for these existing notes.
These developments reflect BorgWarner's strategic initiatives and financial performance. The company's resilience amidst market challenges and its focus on shareholder returns, as demonstrated by the stock repurchase plan, indicate a confident outlook. The company's emphasis on hybrid and electric vehicles, in addition to its restructuring actions, are expected to offset sales declines and provide significant cost savings.
InvestingPro Insights
In light of BorgWarner Inc.'s recent announcement regarding their cash tender offers, a glance at the company's financial health and market performance could provide investors with a broader context. According to InvestingPro, BorgWarner is currently trading near its 52-week low, with a price that's 74.17% of its 52-week high. Despite the recent downturn in share price, the company's solid fundamentals could be a silver lining for investors considering the tender offer or evaluating the company's longer-term prospects.
InvestingPro data reveals a market capitalization of $7.15 billion and a P/E ratio that stands at a modest 10.13, suggesting that the company's stock is potentially undervalued relative to its earnings. Moreover, BorgWarner has maintained dividend payments for 12 consecutive years, which may be an indicator of the company's commitment to returning value to shareholders. The current dividend yield is 1.41%, with a notable track record of liquid assets exceeding short-term obligations, which underscores the company's financial stability.
On the flip side, an InvestingPro Tip highlights that 13 analysts have revised their earnings downwards for the upcoming period, signaling potential concerns about future profitability. However, it's also worth noting that analysts predict the company will be profitable this year, and it has been profitable over the last twelve months. For investors seeking additional insights, there are more InvestingPro Tips available, providing a comprehensive analysis of BorgWarner's financial position and market performance.
These insights and data points serve as a valuable tool for investors to weigh their decisions against the backdrop of BorgWarner's financial stability and market valuation. With additional tips available on InvestingPro, investors have access to a deeper dive into the company's metrics and forecasts.
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