GRANITE CONSTRUCTION INC 8-K/A

What Happened

• Granite Construction Inc. filed an 8‑K reporting that on February 18, 2026 it entered into privately negotiated Exchange Agreements to repurchase $100 million aggregate principal of its 3.75% Convertible Senior Notes due 2028 (the “Exchanged Notes”).
• The cash and/or stock consideration will be based on the per‑share volume‑weighted average price (VWAP) of the company’s common stock during a 15 trading‑day Measurement Period starting February 18, 2026. If the average VWAP is not greater than $140.00, the consideration will be paid entirely in cash.
• Using the prior day’s closing price ($128.61 on February 17, 2026) as an example, the company estimates the total purchase price would be about $283 million (including accrued interest) and would be paid entirely in cash. All Exchanged Notes will be canceled promptly after closing.
• In connection with the exchanges, Granite also entered into partial Unwind Agreements with certain capped‑call counterparties to unwind a portion of the capped calls tied to the original convertible offering; those counterparties will pay Granite an amount based on VWAP during an averaging period beginning February 18, 2026. HudsonWest LLC acted as financial advisor.

Key Details

• Exchange Date: February 18, 2026.
• Principal exchanged: $100.0 million of 3.75% Convertible Notes due 2028.
• Measurement Period: 15 trading days beginning February 18, 2026; stock threshold for any equity consideration: > $140.00 VWAP.
• Pro forma: After closing, expected outstanding principal of the 3.75% notes would be $273.75 million; the transactions are expected to remove roughly 2.2 million shares from the company’s diluted share count (may be partially offset if shares are used in consideration).

Why It Matters

• The transactions, if completed, reduce the amount of convertible debt outstanding and could lower potential future dilution (removing ~2.2M shares from diluted count), though any stock issued as part of the consideration could offset some of that benefit.
• Depending on the final VWAP, Granite may pay a significant cash amount (the company’s example equated to ~$283M) to retire the notes, which is a near‑term cash use investors should note.
• The unwind of capped calls alters previously established hedges tied to the convertibles and generates cash inflows to Granite from the counterparties; the net effect will influence the company’s capital structure and hedging positions once the transactions close.
• The exchanges are subject to customary closing conditions and are not final until closed.