InterDigital Announces Pricing of Private Offering of $275 Million of 1.50% Senior Convertible Notes
March 06 2015 - 7:00AM
InterDigital, Inc. ("InterDigital") (Nasdaq:IDCC) announced today
the pricing of its private offering of $275 million aggregate
principal amount of 1.50% Senior Convertible Notes due 2020 to be
sold to qualified institutional buyers in reliance on Rule 144A
under the Securities Act of 1933, as amended (the "Act").
InterDigital has granted 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 offering is expected to close on March 11, 2015, subject to
certain closing conditions.
The notes will be InterDigital's senior unsecured obligations.
The notes will pay interest semi-annually in cash on March 1 and
September 1 at a rate of 1.50% per year, and will mature on March
1, 2020. The holders of the notes will have the ability to require
InterDigital to repurchase all or any portion of their notes for
cash in the event of a fundamental change. In such case, the
repurchase price would be 100% of the principal amount of the notes
being repurchased plus any accrued and unpaid interest.
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. The notes will be convertible at an
initial conversion rate of 13.8172 shares of InterDigital common
stock per $1,000 principal amount of the notes, which is equivalent
to an initial conversion price of approximately $72.37, which
represents a 35% conversion premium to the closing sale price of
$53.61 per share of InterDigital common stock on the NASDAQ Global
Select Market on March 5, 2015. In addition, following certain
corporate transactions that occur prior to the maturity date,
InterDigital will, in certain circumstances, increase the
conversion rate for a holder that elects to convert its notes in
connection with such a corporate transaction. Upon any conversion,
the notes will be settled in cash, shares of InterDigital's common
stock or a combination thereof, at InterDigital's election.
In connection with the pricing of the notes, InterDigital has
entered into privately negotiated convertible note hedge
transactions with some of the initial purchasers of the notes or
their affiliates (the "hedge counterparties"). The convertible note
hedge transactions collectively will cover, subject to customary
anti-dilution adjustments, the aggregate number of shares of
InterDigital common stock that will initially underlie the notes.
InterDigital has also entered into privately negotiated warrant
transactions with the hedge counterparties whereby InterDigital has
sold 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. The strike
price of the warrant transactions will initially be approximately
$88.46 per share, which represents a 65% premium to the closing
sale price of InterDigital common stock on the NASDAQ Global Select
Market on March 5, 2015. 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. 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 estimates that the net proceeds from the offering
of the notes will be approximately $267 million (or approximately
$307 million if the initial purchasers exercise their
over-allotment option in full), after deducting the initial
purchasers' fees and estimated offering expenses. In addition,
InterDigital expects to receive proceeds from the sale of the
warrants described above. 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. InterDigital expects to use approximately
$43 million of the remaining net proceeds from the offering of the
notes to repurchase shares of InterDigital common stock at $53.61
per share, the closing price of the stock on March 5, 2015, 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 the remaining net
proceeds 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.
CONTACT: Patrick Van de Wille
Email: patrick.vandewille@interdigital.com
+1 (858) 210-4814
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