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hhgregg Sets Stock Sale At 3.5M Shares

Indianapolis – hhgregg has increased its public stock offering from 3 million to 3.5 million shares at a price of $16.50 per share, which will raise about $53.5 million for the retailer’s war chest.

The offering is part of a larger effort to sell $200 million in hhgregg securities, which will be used to fuel an aggressive build-out into the Mid-Atlantic market over the next two years.

The projected proceeds from today’s announced sale come in at the high end of a July 14 prospectus. The underwriters, Credit Suisse Securities and Barclays Capital, may also purchase an additional 525,000 shares at the offering price.

In addition to the public offering, hhgregg will sell another 1 million shares at the public price to an investment fund controlled by Freeman Spogli & Co., a majority shareholder that acquired the retailer in 2005 and helped take it public two years later. The private investment firm currently holds 37.6 percent of hhgregg’s outstanding common stock, although its position would be reduced to 36.3 percent following the public offering.

The electronics and appliance chain has also increased its credit line, from $100 million, to $125 million, according to a filing with the Securities and Exchange Commission.

hhgregg earlier this month announced plans to enter the Baltimore, Philadelphia and Washington markets in 2010 as part of a major expansion into the Mid-Atlantic states. The push into large and midsized metro markets will include as many as 45 stores and a regional distribution center, the company said.