ARIA just did a $200 million unsecured senior note placement (3.625% vs. PPHM's 10.5%) at a 71% premium. How is the PPHM preferred share deal better than this? On the face of it, ARIA looks like they did a pretty sweet negotiation or am I missing something?
ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) today announced the pricing of $200 million aggregate principal amount of its 3.625% convertible senior notes due 2019 (the “Notes”) in a private placement. The Notes will be offered by the initial purchasers only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). ARIAD also granted the initial purchasers of the Notes an option, exercisable for 30 days, to purchase up to an additional $30 million aggregate principal amount of the Notes on the same terms and conditions. As a result of the convertible note hedge and warrant transactions described below, the effective conversion price for the Notes is expected to be $12.00 per share, which represents a 71% premium over the closing price of ARIAD’s common stock of $7.02 per share on June 11, 2014.
The Notes will be senior unsecured obligations of ARIAD, and will bear interest at a rate of 3.625% per year. Interest will be payable semi-annually in arrears on June 15 and December 15 of each year, beginning December 15, 2014. The Notes will mature on June 15, 2019, unless earlier converted.
The Notes will be convertible by the holders beginning December 15, 2018, or earlier upon specified events, and upon conversion, the holders will receive, at ARIAD’s option, shares of ARIAD’s common stock, cash or a combination of shares and cash. The Notes will be convertible at an initial conversion rate of 107.5095 shares of common stock per $1,000 in principal amount of Notes, which is equivalent to an initial conversion price of approximately $9.30 per share, subject to adjustment in certain circumstances specified in the indenture governing the Notes. The initial conversion price represents a conversion premium of 32.5% over the closing price of ARIAD’s common stock of $7.02 per share on June 11, 2014, as reported on The NASDAQ Global Select Market. Following certain corporate events that occur prior to the maturity date, ARIAD will increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event in certain circumstances.
AI
