Babylon (BBLN) Announces Warrant Exchange Offer

Babylon (NYSE:BBLN) announced this morning that it has launched an offer to exchange its outstanding public warrants for 0.295 Class A shares each.

However, Babylon would like to amend the existing warrant agreement so that any warrants not exchanged in the tender offer at this ratio will be automatically exchanged at a ratio that is 10% less at 0.2655. Any change to the existing warrant agreement requires the consent of 50% warrants in circulation in order to execute. Babylon has already secured the agreement of parties representing 38.7% of public warrants and therefore will be soliciting the consent of at least 11.3% more over an offering period that will end at midnight June 17.

As of today, a total of 14,558,313 warrants are outstanding under the symbol “BBLN.W” and these would be converted into 4,294,703 Class A shares should the offer be accepted by all outstanding warrants. Babylon warrants closed Thursday at $0.23, but have surged this morning on the news 26% to about $0.2899 as of this writing.

This move would simplify Babylon’s capital structure and give it more flexibility for financing in the future by wiping out the entire warrant overhang. InsureTech firm Babylon closed its combination with Alkuri Global on October 20, 2021, and its shares have since slumped to a Friday open at $1.17.  At any rate, 0.295 is better than 0.2655 if the agreement is going to be passed, and the price movement suggests the market thinks it will.