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(Reuters) – Hewlett Packard Enterprise (NYSE:)’s shares dropped 6.4% in prolonged buying and selling after the AI server maker introduced a $1.35 billion necessary convertible most popular inventory providing to fund its acquisition of Juniper Networks (NYSE:).
Earlier this yr, HPE stated it could purchase the networking tools producer for $14 billion in an all-cash deal, in an try to reinforce the corporate’s AI choices.
HPE stated web proceeds from the providing will probably be used to cowl charges and bills associated to the pending acquisition.
A convertible most popular inventory providing permits buyers to purchase most popular shares, which frequently fetch increased dividends than widespread shares. Traders even have the choice to transform their most popular shares into widespread shares.
The popular inventory provided by HPE will robotically convert into numerous widespread shares round Sept. 1, 2027, until it has been redeemed or transformed beforehand.
Funding banks Citigroup, J.P. Morgan and Mizuho will act as joint book-running managers for the providing, the corporate stated.
Final week, HPE raised its annual revenue forecast, citing elevated demand for AI servers pushed by increased enterprise spending on AI infrastructure.
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