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

Juniper Networks

09/09/2024 23:40

Sept 9 (Reuters) - Hewlett Packard Enterprise's  HPE.N 
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
 JNPR.N .
    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)
 ((HarshitaMary.Varghese@thomsonreuters.com;))