By Dhirendra Tripathi
Investing.com – Splunk (NASDAQ: SPLK ) shares soared 10% in Tuesday’s premarket trading on twin announcements of a $1 billion investment from Silver Lake and a share repurchase program the same amount.
Silver Lake, a private equity investor focused on tech companies, will invest $1 billion in Splunk’s convertible senior notes.
Splunk expects to use the proceeds to fund growth initiatives and manage its capital structure, including a newly authorized share repurchase program of up to $1 billion that will be executed over time.
Notes issued to Silver Lake will an initial conversion price of $160 per share of Splunk’s common stock, subject to customary anti-dilution and other adjustments. The price is a 27.5% premium to Splunk’s Monday closing of $125.49.
The notes, carrying an annual interest of 0.75%, will mature in July 2026, unless earlier repurchased, redeemed or converted.
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