H&R Block (HRB) Announces Commencement of $1.5B Common Stock 'Modified Dutch Auction' Tender

H&R Block (NYSE: HRB) announced that it is commencing its previously announced "modified Dutch auction" tender offer for up to $1,500,000,000 of its common stock at a price per share not less than $32.25 and not greater than $37.00. The tender offer will expire at 5:00 P.M., New York City time, on Friday, October 2, 2015, unless extended by the company. Tenders of shares must be made on or prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer, in each case, in accordance with the procedures described in the tender offer materials.

A "modified Dutch auction" tender offer allows shareholders to indicate how many shares and at what price within H&R Block's specified range they wish to tender. Based on the number of shares tendered and the prices specified by the tendering shareholders, the company will determine the lowest price per share within the range that will enable the company to purchase shares having an aggregate purchase price of up to $1,500,000,000. Upon the terms and subject to the conditions of the tender offer, if shares having an aggregate purchase price of less than $1,500,000,000 are validly tendered and not validly withdrawn, the company will buy all shares validly tendered and not validly withdrawn, subject to the satisfaction, in H&R Block's reasonable judgment, or waiver of the conditions to the tender offer. The company also reserves the right, in the event that more than $1,500,000,000 of its shares are tendered in the tender offer at or below the purchase price, to purchase up to an additional 2% of its shares outstanding without amending or extending the tender offer. All shares purchased by the company in the tender offer will be purchased at the same price. Shareholders whose shares are purchased in the tender offer will be paid the determined purchase price in cash, less any applicable withholding taxes and without interest, after the expiration of the tender offer.

H&R Block expects to fund the purchase of shares in the tender offer with a combination of available cash, borrowings under a new credit agreement (the "2015 Credit Facility") that its wholly owned subsidiary, Block Financial LLC ("Block Financial"), intends to enter into prior to the consummation of the tender offer (and that will be guaranteed by H&R Block) and/or proceeds of incremental debt Block Financial may issue prior to the consummation of the tender offer. The tender offer will not be conditioned upon any minimum number of shares being tendered, but will be subject to certain other conditions, including the condition that Block Financial enter into the 2015 Credit Facility and the availability of funds thereunder that, together with other available funds, are sufficient to fund the purchase of shares in the tender offer.

The complete terms and conditions of the tender offer are contained in the Offer to Purchase, Letter of Transmittal and the other offer materials to be mailed to shareholders beginning on September 2, 2015.

J.P. Morgan Securities LLC will serve as the dealer manager for the tender offer. Georgeson Inc. will serve as information agent for the tender offer, and Wells Fargo Bank, N.A. will serve as the depositary for the tender offer.

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