Monster Beverage Announces $3 Billion Stock Buyback Offer

Monster Beverage Corp. is starting a modified “Dutch auction” tender offer to purchase shares of its common stock for cash at a price per share of not less than $53.00 and not greater than $60.00, for a maximum aggregate purchase price of up to $3 billion.

The tender offer runs May 8 - June 5, 2024, 11:59 p.m. EST, unless extended or earlier terminated by Monster. The tender offer will be funded using a combination of $2 billion of cash on hand, $750 million in borrowings under a new term loan, and $250 million in borrowings under a new revolving credit facility.

Monster and certain of its subsidiaries expect to enter into a new credit agreement providing for a new $750 million three-year delayed draw senior term loan A facility and a new $750 million five-year senior revolving credit facility at least five business days prior to the expiration of the tender offer. It is a condition to the consummation of the tender offer that the credit agreement is entered into and at least $1 billion is funded under the Term Loan and the RCF at least five business days prior to the expiration of the tender offer. If the Financing Condition is not satisfied and Monster does not waive the Financing Condition, Monster may amend, terminate, or extend the tender offer.

Monster shareholders may tender all or a portion of their shares at a price specified by the tendering shareholder of not less than $53.00 nor greater than $60.00 per share in increments of $0.50. Alternatively, Monster shareholders may tender shares without specifying a purchase price, in which case their shares will be purchased at the purchase price determined in accordance with the tender offer. When the tender offer expires, Monster will determine the lowest price per share within the range specified above that will enable it to purchase the maximum number of shares of its common stock having an aggregate purchase price up to $3.0 billion.

All shares accepted in the tender offer will be purchased at the same price, which may be higher or lower than the market price immediately prior to or during the tender offer. If the tender offer is fully subscribed, then shares of common stock having an aggregate purchase price of up to $3.0 billion will be purchased, which would represent approximately between 4.8% to 5.4% of Monster’s issued and outstanding shares as of April 22, 2024, depending on the purchase price payable in the tender offer.

In addition, if shares valued at more than the maximum aggregate purchase price of up to $3.0 billion are tendered in the tender offer at or below the purchase price, Monster may accept for purchase at the purchase price pursuant to the tender offer up to an additional 2% of its outstanding shares without extending the expiration time of the tender offer.

The tender offer is being made outside of Monster’s existing stock repurchase programs. The tender offer provides all Monster shareholders, including Rodney Sacks and Hilton Schlosberg, Monster’s Co-CEOs, with the opportunity to obtain liquidity for all or a portion of their shares with less potential disruption than open-market sales or other transactions. Sacks and Schlosberg have communicated their intent to tender up to 610,000 and 610,000 shares, respectively, for investment diversification and estate planning purposes. In addition, Sterling Trustees LLC, which controls trusts and entities for the benefit of certain family members of Sacks and Schlosberg, has advised Monster that it intends to tender up to an aggregate of 20,500,000 shares on behalf of such trusts and entities.

Mark S. Vidergauz and Mark J. Hall, members of the Board, and Thomas J. Kelly and Emelie C. Tirre, executive officers, intend to tender up to 20,000, 500,000, 80,000 and 45,000 shares, respectively, that they beneficially own in the offer. The tender of shares by Sacks, in particular, may provide him some flexibility to consider his own potential options, which may also help Monster continue succession planning for its next phase of leadership. Sacks is considering reducing his day-to-day management responsibilities starting in 2025, while continuing to manage certain areas of Monster's business for which he has always been responsible. At that time, Mr. Sacks intends to remain Chairman of the Board, and Mr. Schlosberg would segue from Co-CEO to CEO.