InterDigital Announces Proposed Private Offering of $275 Million of Senior Convertible Notes
March 04 2015 - 4:01PM
InterDigital, Inc. ("InterDigital") (Nasdaq:IDCC) announced that it
intends to offer, subject to market and other conditions, $275
million aggregate principal amount of Senior Convertible Notes due
2020 in a private offering. The notes will be offered only to
qualified institutional buyers in reliance on Rule 144A under the
Securities Act of 1933, as amended (the "Act"). InterDigital also
expects to grant to the initial purchasers of the notes a 13-day
option to purchase up to an additional $41 million aggregate
principal amount of notes, solely to cover over-allotments, if any.
The notes will pay interest semi-annually in cash on March 1 and
September 1 and will mature on March 1, 2020. Prior to December 1,
2019, the notes will be convertible only upon the occurrence of
certain events and during certain periods, and thereafter, at any
time until the second scheduled trading day preceding the maturity
date. Conversions of the notes will be settled in cash, shares of
InterDigital's common stock or a combination thereof, at
InterDigital's election. The interest rate, the conversion rate of
notes and certain other terms of the notes will be determined by
negotiations between InterDigital and the initial purchasers of the
notes.
In connection with the pricing of the notes, InterDigital
expects to enter into one or more privately negotiated convertible
note hedge transactions with one or more of the initial purchasers
of the notes or their affiliates or other financial institutions
(the "hedge counterparties"). The convertible note hedge
transactions collectively are expected to cover, subject to
customary anti-dilution adjustments, the aggregate number of shares
of InterDigital common stock that will initially underlie the
notes. InterDigital also expects to enter into one or more
privately negotiated warrant transactions with the hedge
counterparties whereby InterDigital will sell to the hedge
counterparties warrants relating to the same number of shares of
InterDigital common stock, with such number of shares subject to
customary anti-dilution adjustments. In addition, if the initial
purchasers exercise their over-allotment option to purchase
additional notes, InterDigital expects to enter into one or more
additional warrant transactions and to use a portion of the
proceeds from the sale of the additional notes and warrant
transactions to enter into additional convertible note hedge
transactions. The convertible note hedge transactions are expected
to reduce the potential dilution with respect to InterDigital
common stock and/or offset any potential cash payments InterDigital
is required to make in excess of the principal amount of converted
notes, as the case may be, upon any conversion of the notes in the
event that the market price per share of InterDigital common stock
exceeds the strike price of the convertible note hedge
transactions. However, the warrant transactions will have a
dilutive effect to the extent that the market price per share of
InterDigital common stock exceeds the applicable strike price of
the warrants on any expiration date of the warrants.
In connection with establishing their initial hedge of the
convertible note hedge transactions and warrant transactions and
concurrently with, or shortly after, the pricing of the notes, the
hedge counterparties and/or their affiliates expect to purchase
InterDigital common stock in open market transactions and/or
privately negotiated transactions and/or enter into various
cash-settled derivative transactions with respect to InterDigital
common stock concurrently with, or shortly after, the pricing of
the notes. In addition, the hedge counterparties and/or their
affiliates may modify their hedge positions following the pricing
of the notes by entering into or unwinding various derivative
transactions with respect to InterDigital common stock and/or by
purchasing or selling InterDigital common stock in open market
transactions and/or privately negotiated transactions following the
pricing of the notes from time to time (and are likely to do so
during any conversion period related to a conversion of notes). Any
of these hedging activities could also increase (or reduce the size
of any decrease in) the market price of InterDigital common
stock.
InterDigital expects to use a portion of the net proceeds from
the offering of the notes and the proceeds from the sale of the
warrants to fund the cost of the convertible note hedge
transactions. The remaining net proceeds from the offering of the
notes will be used for the repurchase of up to $50 million of
shares of InterDigital common stock from institutional investors
through one of the initial purchasers or its affiliate, as
InterDigital's agent, concurrently with the pricing of the offering
of the notes, and for general corporate purposes, which may
include, among other things, the repurchase or retirement of
InterDigital's outstanding indebtedness.
The notes and the shares of InterDigital common stock issuable
upon conversion, if any, have not been registered under the Act or
applicable state securities laws and may not be offered or sold in
the United States except pursuant to an exemption from the
registration requirements of the Act and applicable state
securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
About InterDigital®
InterDigital develops technologies that are at the core of
mobile devices, networks, and services worldwide. We solve many of
the industry's most critical and complex technical challenges,
inventing solutions for more efficient broadband networks and a
richer multimedia experience years ahead of market deployment.
InterDigital has licenses and strategic relationships with many of
the world's leading wireless companies. Founded in 1972,
InterDigital is listed on NASDAQ and is included in the S&P
MidCap 400® index.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
CONTACT: Patrick Van de Wille
Email: patrick.vandewille@interdigital.com
+1 (858) 210-4814
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