Cephalon Announces Proposed Convertible Subordinated Notes Offering
Thursday June 5, 4:29 pm ET
Plans to Use Portion of Net Proceeds to Redeem Outstanding 5 1/4% Convertible Subordinated Notes Due 2006
WEST CHESTER, Pa., June 5 /PRNewswire-FirstCall/ -- Cephalon, Inc. (Nasdaq: CEPH - News) announced today that it intends to offer, subject to market and other conditions, $600 million in aggregate principal amount of convertible subordinated notes through an offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and Regulation S under the Securities Act. The interest rate, conversion price and offering price are to be determined by negotiations between Cephalon and the initial purchasers of the notes. The notes will be subordinate to existing and future senior indebtedness of Cephalon.
The securities offered will consist of:
-- Zero Coupon Convertible Subordinated Notes due 2033, First Putable June 2008; and
-- Zero Coupon Convertible Subordinated Notes due 2033, First Putable June 2010.
Cephalon will grant the initial purchasers of the notes a 13-day option to purchase up to an additional aggregate $150 million principal amount of the notes.
Cephalon plans to use the net proceeds for:
-- The redemption of all of the Company's outstanding 5 1/4% Convertible Subordinated Notes due 2006;
-- The purchase of a convertible note hedge strategy with respect to Cephalon's common stock, which is expected to reduce the potential dilution from conversion of the notes. In connection with those transactions, an affiliate of one of the initial purchasers will take positions in Cephalon's common stock in secondary market transactions and/or enter into various derivative transactions either before or after the pricing of the notes; and
-- Working capital and other corporate purposes, which may include the acquisition of other businesses, products, product rights or technologies and the repurchase, redemption or retirement of other existing indebtedness. Cephalon does not currently have any definitive agreements, arrangements or understandings with respect to any such uses. |
