JWCA advises The Marcus Corporation on the repurchase of $40mm convertible notes for cash and concurrent capped call unwind

may 2024 | read press release

Transaction Background

In May 2024, JWCA advised The Marcus Corporation on the cash repurchase of $40mm of its outstanding 2025 convertible. The Marcus Corporation wanted to repurchase their notes to opportunistically manage their outstanding liabilities and capital structure.

The Marcus Corporation’s objectives included:

  • Liability management: retire a portion of the 2025 convertible at an attractive pricing

  • Minimize transaction and friction costs: execute as efficiently as possible with a focus on minimizing execution costs

In its role as Repurchase Agent for the transaction, JWCA provided the following support for the Company:

  • Provided analysis and advice around tactics related to investor targeting and engagement

  • Led the investor outreach, negotiation, and execution of repurchases

  • Assisted the Company with the analysis of convertible economics, pricing dynamics, and accounting impact

  • Managed capped call unwind negotiations

  • VWAP averaging period designed to achieve an outcome with minimal market impact

Results

The Marcus Corporation executed a successful liability management transaction for its 5.00% convertible notes due 2025:

  • The Company repurchased $40mm face value of their convertible notes (~40% of outstanding) for cash

  • Capped call unwind negotiations produced meaningful savings for the Company