The Michaels Companies Announces Pricing of Tender Offer for its 7.875% Senior Notes due 2029
MWN-AI** Summary
The Michaels Companies, Inc. has recently announced the pricing of its tender offer to repurchase its outstanding 7.875% Senior Notes, which are set to mature in 2029. This tender offer aims to provide a cash purchase option for all holders of these notes. The announcement provides critical details regarding the total consideration for the notes, which is determined by a combination of a fixed spread and the yield to maturity based on U.S. Treasury reference securities.
For those who validly tender their notes by the early deadline of 5:00 PM on March 3, 2026, the total consideration will include an early tender payment of $30 per $1,000 principal amount, amounting to a total of $1,006.24, based on the reference yield of 3.740% for the relevant U.S. Treasuries. Meanwhile, holders who submit their notes after the early tender time but before the offer closes will receive a different consideration, calculated by deducting the early tender payment from the total consideration.
The expected settlement date for the notes tendered by the early deadline is March 5, 2026. The offer is being managed by J.P. Morgan Securities LLC and UBS Investment Bank, with Global Bondholder Services Corporation serving as the information agent and depositary.
Michaels, a leading retailer in the creative and craft space, operates more than 1,300 stores across North America. The company emphasized that this announcement serves as informational and not a solicitation to purchase, advising holders to make independent decisions regarding their notes.
MWN-AI** Analysis
The Michaels Companies' announcement regarding the pricing of its tender offer for the 7.875% Senior Notes due 2029 signals several key aspects for investors. The fixed spread and the reference yield provide a benchmark for assessing the bond's attractiveness against current market conditions. With a total consideration of $1,006.24 per $1,000 principal amount, this tender offer comes with a premium that may appeal to current noteholders looking for liquidity.
Investors should consider the implications of the tender offer in terms of the company's overall financial health and strategy. The fact that Michaels is proactively managing its debt could indicate a commitment to reducing interest burdens or refining capital structure, especially in a potentially rising rate environment. This could enhance longer-term creditworthiness and might attract institutional investors looking for stabilized income sources.
However, the early tender payment incentive highlights a competitive market for yield, suggesting investors remain cautious about holding the notes in a fluctuating interest rate landscape. The reference yield of 3.740% on U.S. Treasury securities indicates a risk-free benchmark against which the notes must outperform.
Given these dynamics, current holders of the 7.875% notes should evaluate their positions carefully. If the yield spread remains favorable, they may opt to refinance into other instruments or sectors with more attractive yields. Furthermore, potential investors considering entry into Michaels' bond market should weigh the company's operational stability and market position in the crafting and retail sectors.
Overall, while the tender offer presents a short-term liquidity boost, maintaining a keen focus on the macroeconomic environment and industry trends is essential for informed decision-making. Investors should perform thorough due diligence before acting on this tender offer.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
IRVING, Texas, March 3, 2026 /PRNewswire/ -- The Michaels Companies, Inc. (the "Company"), as successor to Magic MergeCo, Inc., today announced the pricing of its previously announced tender offer (the "Tender Offer") to purchase for cash any and all of its outstanding 7.875% Senior Notes due 2029 (the "Notes"). The Tender Offer is subject to the terms and conditions set forth in the Offer to Purchase, dated February 17, 2026, relating thereto (the "Offer to Purchase").
The total consideration (the "Total Consideration") to be paid in the Tender Offer for Notes validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on Tuesday, March 3, 2026 (the "Early Tender Time" or the "Withdrawal Deadline") was calculated in the manner described in the Offer to Purchase by reference to the fixed spread specified in the table below (the "Fixed Spread") plus the yield to maturity (the "Reference Yield") based on the bid-side price of the U.S. Treasury reference security (the "UST Reference Security"), as set forth in the table below, and includes an early tender payment of $30.00 per $1,000 principal amount of Notes accepted for purchase (the "Early Tender Payment"). The Reference Yield was determined at 2:00 p.m., New York City time, on Tuesday, March 3, 2026, by the dealer managers identified below. The following table sets forth certain information regarding the pricing of the Tender Offer, including the Reference Yield, the Fixed Spread and the Total Consideration:
Notes | CUSIP Number | UST Reference Security | Reference Yield | Fixed Spread (bps) | Total Consideration |
7.875% Senior Notes due 2029 | 55916A AB0 / U55655 AB7 | 4.875% UST due April 30, 2026 | 3.740 % | +0 | $1,006.24 |
Holders of Notes who validly tender their Notes following the Early Tender Time and prior to the expiration of the Tender Offer will only receive the applicable "Tender Offer Consideration" per $1,000 principal amount of any such Notes that are accepted for purchase, which is equal to the Total Consideration minus the Early Tender Payment.
The Total Consideration or the Tender Offer Consideration, as applicable, for Notes accepted for purchase in the Tender Offer will be paid together with accrued and unpaid interest with respect to such Notes from and including the most recent interest payment date for the Notes to, but not including, the applicable settlement date.
The settlement date for all Notes validly tendered at or prior to the Early Tender Time, and not validly withdrawn prior to the Withdrawal Deadline, and accepted by the Company for purchase in the Tender Offer is expected to occur on March 5, 2026, a day prior to the early settlement date previously announced.
J.P. Morgan Securities LLC and UBS Investment Bank are acting as the dealer managers (the "Dealer Managers") for the Tender Offer. Global Bondholder Services Corporation is acting as the Information Agent and the Depositary for the Tender Offer. Questions regarding the Tender Offer should be directed to J.P. Morgan Securities LLC at (212) 834-7489 (collect) or (866) 834-4666 (toll-free) and UBS Investment Bank at (212) 882-5723 (collect) and (833) 690-0971 (toll-free). Requests for documentation should be directed to Global Bondholder Services Corporation at (212) 430-3774 (for banks and brokers) or (855) 654-2014 (for all others).
This announcement is for informational purposes only. This announcement is not an offer to purchase or a solicitation of an offer to sell the Notes, or a notice of redemption with respect to the Notes. The Tender Offer is being made solely pursuant to the Offer to Purchase. The Tender Offer is not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Tender Offer to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on behalf of the Company by the Dealer Managers, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
None of the Company or its affiliates, the Dealer Managers, the Information Agent, the Depositary or the trustee with respect to the Notes is making any recommendation as to whether holders should tender any Notes in response to the Tender Offer, and neither the Company nor any such other person has authorized any person to make any such recommendation. Holders must make their own decision as to whether to tender any of their Notes, and, if so, the principal amount of Notes to tender.
About The Michaels Companies
At The Michaels Companies, Inc., our purpose is to fuel the joy of creativity and celebration. As the leading destination for creating and celebrating in North America, we operate over 1,300 stores in 49 states and Canada and online at Michaels.com and Michaels.ca. The Michaels Companies, Inc. also owns Artistree, a manufacturer of custom and specialty framing merchandise. Founded in 1973 and headquartered in Irving, Texas, Michaels is the best place for all things creative. For more information, please visit www.michaels.com.
The Michaels Companies Safe Harbor Statement:
Some of the statements in this news release constitute "forward-looking statements" that do not directly or exclusively relate to historical facts. The forward-looking statements made in this release reflect the Company's intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside of the Company's control. Known risks include, among others, the risks included in the Company's reports posted on the website it maintains to provide information and reports to holders of the Notes. Because actual results could differ materially from the Company's intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained in this press release with caution. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT:
Allison Malkin
ICR
allison.malkin@icrinc.com
SOURCE The Michaels Companies, Inc.
FAQ**
How does the pricing of the Tender Offer for The Michaels Companies Inc. MIK's 7.875% Senior Notes due 2029 compare to recent market yields and what could that mean for investor sentiment?
What are the potential impacts of the early tender payment of $30.00 per $1,000 principal amount on the overall participation rate in The Michaels Companies Inc. MIK's Tender Offer?
In light of the upcoming settlement date, how might The Michaels Companies Inc. MIK's liquidity position be affected by the completion of this Tender Offer?
Can you explain the rationale behind The Michaels Companies Inc. MIK's decision to engage dealer managers like J.P. Morgan and UBS for the Tender Offer, and how does it align with the company's broader funding strategy?
**MWN-AI FAQ is based on asking OpenAI questions about The Michaels Companies Inc. (NASDAQ: MIK).
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