The tech company is looking at investor interest in a possible $9.5 billion (8.6 billion euros) debt package to finance its proposed acquisition of Juniper Networks.
HPE reached an agreement earlier this year for the $14 billion acquisition. Buying Juniper will allow the company to double its network market presence. HPE is already active in this market with Aruba, but the future acquisition of Juniper will give it a more complete portfolio to set up companies’ network architectures. Juniper, for example, offers a strong artificial intelligence offering with Mist AI.
Bloomberg now reports that HPE is trying to make financial arrangements to make the acquisition happen. The acquisition amount, agreed upon in January, is $14 billion. At the time, financing was assumed to be through loans, which would eventually be repaid with a combination of new debt, mandatorily convertible preferred securities, and cash.
Debt and equity
A bit more is now known about the actual fulfillment. First, calls would take place today with investors who might be interested in borrowing through debt securities. A total of $9.5 billion is involved. Of this, $3 billion is a so-called term loan, while $6.5 billion consists of unsecured bonds with maturities of five to 30 years.
In addition to the amount HPE wants to raise through bonds, it became clear earlier this week that the company also intends to raise $1.35 billion through preferred stock. This type of stock is sold to investors who get priority in dividend payments.
Tip: HPE and Juniper reach an agreement: 12.8 billion euro acquisition