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Technology Stocks : WDC/Sandisk Corporation
WDC 163.26+3.5%Nov 28 12:59 PM EST
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To: Ron C who wrote (6694)8/21/1999 1:06:00 PM
From: Bargain Hunter  Read Replies (2) of 60323
 
For info on the Sandisk PEPS Trust, see sec.gov. It is hard to understand the details because most of the important numbers are omitted. It isn't clear to me whether they were omitted from the filing or whether they are suppressed in the published version.

The basic idea is that you buy some number of shares in the trust, at a price equivalent to the price of Sandisk shares at that time. The trust uses the proceeds to buy zero-coupon treasuries and a contract to purchase Sandisk shares from Seagate when the trust terminates. The trust pays quarterly dividends by cashing in the zero-coupons which are selected to mature at the necessary times with the appropriate face value. When the trust terminates it distributes the Sandisk shares bought from Seagate to the trust shareholders.

Some extra complications: Seagate can elect to pay in cash instead of shares; the number of shares involved is not clear from the filing, except that it will be less than or equal to one Sandisk share per PEPS share, based on a future Sandisk share price; the duration of the trust is unclear (although it would appear to be several years) and the duration can be reduced or increased under certain conditions.

Expect a new filing within the next month filling in more details.
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