Gilead to Offer $2.2 Billion of Convertible Senior Notes; Company to Repurchase $1 Billion in Common Stock
July 26 2010 - 7:05AM
Business Wire
Gilead Sciences, Inc. (Nasdaq:GILD) today announced its
intention to offer, subject to market and other conditions,
approximately $1.1 billion principal amount of convertible senior
notes due 2014 and approximately $1.1 billion principal amount of
convertible senior notes due 2016 to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”). The notes will be convertible under certain
circumstances. Upon conversion, holders will receive cash up to the
principal amount, and any excess conversion value will be settled,
at the company’s election, in cash, common stock or a combination
of cash and common stock. Gilead also expects to grant the initial
purchasers an option to purchase up to $300 million aggregate
principal amount of additional notes to cover overallotments.
Gilead expects to use at least $1 billion of the net proceeds
from the offering to repurchase shares of its common stock in
privately negotiated, off-market transactions from purchasers of
the notes, contemporaneously with the pricing of the notes
offering, and thereafter pursuant to its previously announced $5
billion stock repurchase program. In addition, proceeds from the
offering, together with any proceeds from the warrant transactions
described below, will be used to fund convertible note hedge
transactions described below that Gilead expects to enter into with
one or more of the initial purchasers of the notes and/or their
affiliates, as option counterparties. The remaining proceeds from
the offering will be added to Gilead’s working capital and will be
used for general corporate purposes, including additional
repurchases of its common stock and repayment of Gilead’s existing
indebtedness. Gilead’s repurchases of its common stock may be made
through open market and private block transactions pursuant to Rule
10b5-1 plans, privately negotiated transactions, an accelerated
share repurchase program or other means as determined by Gilead’s
management.
In connection with the offering, Gilead intends to enter into
convertible note hedge transactions with one or more of the option
counterparties for the purpose of reducing the potential dilution
upon future conversion of the notes. Gilead also intends to enter
into warrant transactions with the same option counterparties. The
warrant transactions could have a dilutive effect on Gilead’s
earnings per share to the extent that at any time the market price
of its common stock exceeds the strike price of the warrants. In
addition, if the initial purchasers exercise their option to
purchase additional notes, Gilead expects to enter into additional
convertible note hedge transactions and warrant transactions with
the same option counterparties.
In connection with establishing their initial hedge positions
with respect to the convertible note hedge transactions and the
warrant transactions, the option counterparties and/or their
affiliates expect to enter into various derivative transactions
with respect to Gilead’s common stock concurrently with or shortly
after the pricing of the notes. Gilead’s repurchase of shares of
its common stock and the initial hedging activity by the option
counterparties and/or their affiliates could increase (or limit a
decrease in) the market price of Gilead’s common stock at the time
of the pricing of the notes. In addition, the option counterparties
and/or their affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
Gilead’s common stock and/or purchasing or selling shares of
Gilead’s common stock in secondary market transactions following
the pricing of the notes and prior to the maturity of the notes
(and are likely to do so during any conversion reference period
related to a conversion of notes). This activity could limit an
increase or cause a decrease in the market price of Gilead’s common
stock or the trading price of the notes.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any jurisdiction. Any
offers of the securities will be made only by means of a private
offering memorandum. The notes and the shares of Gilead’s common
stock issuable upon conversion or exercise of the notes have not
been, and will not be, registered under the Securities Act or the
securities laws of any other jurisdiction and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
About Gilead
Sciences
Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes innovative therapeutics in areas of
unmet medical need. The company’s mission is to advance the care of
patients suffering from life-threatening diseases worldwide.
Headquartered in Foster City, California, Gilead has operations in
North America, Europe and Australia.
Forward-Looking
Statements
This press release includes forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of
1995, that are subject to risks, uncertainties and other factors,
including the current market demand for these types of securities
and the securities of Gilead and the negotiations between Gilead
and the initial purchasers, and Gilead’s ability to consummate
repurchases of shares of its common stock (including under the
accelerated share repurchase program) due to changes in our stock
price, corporate or other market conditions. These risks,
uncertainties and other factors could cause actual results to
differ materially from those referred to in the forward-looking
statements. The reader is cautioned not to rely on these
forward-looking statements. Other risks that could impact the
offering are described in detail in Gilead’s Annual Report on Form
10-K for the year ended December 31, 2009 and Gilead’s Quarterly
Report on Form 10-Q for the three months ended March 31, 2010, each
as filed with the U.S. Securities and Exchange Commission, and each
may be updated by the risk factors set forth in any subsequent
filing by Gilead with the U.S. Securities and Exchange Commission.
All forward-looking statements are based on information currently
available to Gilead and Gilead assumes no obligation to update any
such forward-looking statements.
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gilead Sciences (NASDAQ:GILD)
Historical Stock Chart
From Jul 2023 to Jul 2024