Eastman Chemical launches tender offer for notes

KINGSPORT, Tenn. - Eastman Chemical Company (NYSE:EMN), a global specialty materials producer, announced today a tender offer to repurchase up to $250 million of its 3.800% notes due in 2025. The offer is part of the company's financial management strategy and is detailed in the Offer to Purchase dated today.

The tender offer is set to expire at 5:00 p.m., New York City time, on August 26, 2024, unless extended or terminated earlier by Eastman. To be eligible for the full tender consideration, including an early tender premium of $30 per $1,000 principal amount, note holders must tender their securities by 5:00 p.m., New York City time, on August 9, 2024.

The total consideration for the notes accepted will be determined by a fixed spread over a U.S. Treasury Reference Security, with the final amount inclusive of the early tender premium. The price determination is scheduled for 10:00 a.m., New York City time, on August 12, 2024.

Eastman reserves the right to change the terms of the offer, including the tender cap, without extending the deadlines. The company's ability to purchase notes is subject to certain conditions, including the successful issuance of new debt securities to fund the tender offer.

Payments for purchased notes will include accrued and unpaid interest up to, but not including, the settlement dates. The anticipated early settlement date is August 14, 2024, with the final settlement expected to occur on August 28, 2024, for notes tendered after the early deadline.

The tender offer is not contingent on a minimum amount of notes being tendered. However, if the offer is oversubscribed as of the early tender deadline, subsequent tenders may not be accepted. The company has engaged D.F. King & Co., Inc. as the tender and information agent and has appointed Barclays Capital Inc., J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC as dealer managers for the tender offer.

Eastman Chemical has reported robust Q1 results, with earnings per share exceeding expectations by 7% across all operating segments, largely due to lower-than-expected expenses and strong performance.

Citi also increased its price target for Eastman Chemical to $115 from $111, following the company's earnings call where it outlined key developments for the upcoming fiscal year.

Eastman Chemical received upgrades from UBS and Piper Sandler. UBS upgraded Eastman Chemical shares from Neutral to Buy and increased the price target to $128.00, recognizing potential growth and earnings opportunities. Piper Sandler increased its price target for Eastman Chemical to $105.00 from the previous $90.00, influenced by the company's first-quarter earnings surpassing expectations.

Evercore ISI maintained its In Line rating and $118.00 price target for Eastman Chemical, highlighting the company's encouraging trajectory and the potential benefits of demand normalization for volume growth in core segments.

InvestingPro Insights

In light of Eastman Chemical Company's (NYSE:EMN) recent announcement regarding its tender offer to repurchase notes, investors may find the following metrics and tips from InvestingPro particularly relevant. The company, with a market capitalization of $11.77 billion, is trading at a P/E ratio of 13.55, indicating that it may be valued attractively relative to its earnings. Additionally, the P/E ratio has adjusted to 18.55 over the last twelve months as of Q2 2024, reflecting changes in the company's earnings landscape.

As an InvestingPro Tip, it's noteworthy that Eastman Chemical has been consistently shareholder-friendly, as evidenced by its aggressive share buyback strategy and a high shareholder yield. Moreover, the company has a commendable track record of raising its dividend for 14 consecutive years, which signals a commitment to returning value to its shareholders. This is further substantiated by the fact that Eastman Chemical has maintained dividend payments for an impressive 31 consecutive years.

Investors might also consider the company's stock performance, which has been characterized by low price volatility. This could be an appealing factor for those looking for stable investment options in the specialty materials sector. Additionally, analysts predict the company will remain profitable this year, echoing the positive sentiment surrounding its financial health.

For investors seeking more in-depth analysis and additional insights, there are a total of 10 InvestingPro Tips available for Eastman Chemical Company at https://www.investing.com/pro/EMN. To access these tips and more detailed metrics, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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