Monster Beverage intends to commence tender offer to repurchase $3B of stock

The company intends to commence a modified “Dutch Auction” tender offer for up to $3B in value of shares of its common stock, subject to market conditions, at a specified price range that is yet to be determined. The company believes that the tender offer represents an efficient mechanism to permit shareholders the opportunity to obtain liquidity without the potential disruption that can result from market sales. The company expects to fund the tender offer with approximately $2B of cash on hand and approximately $1B in combined borrowings, consisting of a new revolving credit facility and a new delayed draw term loan facility, each expected to be consummated prior to the completion of the tender offer. The tender offer will be made outside of the company’s previously authorized repurchase programs and will allow the company to retain the ability to purchase additional shares through the previously authorized repurchase programs in the future. The company’s co-CEOs have indicated that they intend to participate in the offer for investment diversification and estate planning purposes. Sacks’ participation, in particular, may provide him some flexibility to consider his own potential options, which may also help the company continue succession planning for its next phase of leadership. In this regard, after consultation with the company’s board, Sacks is considering reducing his day-to-day management responsibilities starting in 2025, while continuing to manage certain areas of the company’s business for which he has always been responsible. At that time, Sacks intends to remain chairman of the company’s board and Schlosberg would segue from co-CEO to CEO.