Lam Research Corporation Announces Intention to Offer $700 Million of Convertible Notes
May 05 2011 - 7:14AM
Business Wire
Lam Research Corporation (NASDAQ:LRCX) today announced that it
proposes to offer $700 million of convertible senior notes, subject
to market conditions and other factors. The notes would be issued
in two tranches of $350 million each due in May 2016 and May 2018,
respectively, and are to be offered and sold to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended. The notes will be convertible, upon certain
conditions, into cash up to their principal amount and, with
respect to any excess conversion value, shares of Lam Research
common stock. The interest rate, conversion rate, offering price
and other terms will be determined by negotiations between the
company and the initial purchasers of the notes. The company also
expects to grant to the initial purchasers the right to purchase an
additional $50 million of each tranche to cover
over-allotments.
Lam Research intends to use a portion of the net proceeds of the
offering to repurchase, depending on interest, a minimum of
1,000,000 shares of its common stock and may repurchase up to
3,000,000 shares of its common stock from purchasers of notes in
privately negotiated transactions effected through one of the
initial purchasers. The price of the common stock repurchased in
such transactions is expected to equal the closing price per share
of its common stock on the date of the pricing of the offering.
This activity could affect the market price of Lam Research common
stock concurrently with, or shortly after, the pricing of the
notes, and could result in a higher effective conversion price for
the notes. In addition, following this offering Lam Research may
from time to time repurchase additional shares of common stock
pursuant to our stock repurchase program. Any future repurchases
could affect the market price of Lam Research common stock or the
notes.
In connection with the pricing of the notes, Lam Research also
expects to enter into privately negotiated convertible note hedge
and warrant transactions with the initial purchasers or their
respective affiliates. Lam Research intends to use a portion of the
net proceeds to pay the cost of the convertible note hedge
transactions (taking into account the proceeds to it from the sale
of the warrants). If the initial purchasers exercise their
over-allotment option with respect to a series of notes, Lam
Research expects to sell additional warrants and use a portion of
the net proceeds from the sale of the additional notes, together
with the proceeds from the additional warrants, to enter into
additional convertible note hedge transactions.
The convertible note hedge transactions are expected to reduce
the potential dilution with respect to shares of Lam Research
common stock upon any conversion of the notes; however, the warrant
transactions will have a dilutive effect with respect to Lam
Research common stock to the extent that the market price per share
of Lam Research common stock exceeds the applicable strike price of
the warrants. In connection with the convertible note hedge and
warrant transactions, the initial purchasers or their affiliates
that will be parties to those transactions have advised Lam
Research that they expect to enter into various derivative
transactions with respect to Lam Research common stock. This
activity could increase (or reduce the size of any decrease in) the
market price of Lam Research common stock or the notes above market
levels that would have prevailed or prevent or retard a decline in
the market price of Lam Research common stock or the notes. In
addition, the initial purchasers or their affiliates that are
parties to those transactions have advised Lam Research that they
may modify their hedge positions by entering into or unwinding
various derivatives with respect to Lam Research common stock
and/or purchasing or selling of Lam Research 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 observation period related to a conversion of notes).
This activity could also cause or avoid an increase or a decrease
in the market price of Lam Research common stock or the notes,
which could affect holders’ ability to convert the notes and, to
the extent the activity occurs during any observation period
related to the notes, it could affect the number of shares and
value of the consideration that holders will receive upon
conversion of the notes.
The balance of the net proceeds of the offering is intended to
be used for general corporate purposes, including working capital
and capital expenditures. Lam Research may also use a portion of
the net proceeds to acquire other businesses, products or
technologies, or to repurchase shares of our common stock under our
share repurchase program. The company does not have agreements or
commitments for any specific acquisition at this time.
This announcement does not constitute an offer to sell, or the
solicitation of an offer to buy, any of these securities. Any
offers of the notes will be made only by means of a confidential
offering memorandum. The notes, the convertible note hedge
transactions, the warrants and the shares of Lam Research common
stock underlying these securities have not been and will not be
registered under the Securities Act of 1933, as amended, or the
securities laws of any other jurisdiction and may not be offered or
sold in the United States without registration or an applicable
exemption from registration requirements.
Lam Research Corporation is a major provider of wafer
fabrication equipment and services to the world's semiconductor
industry. Lam's common stock trades on The NASDAQ Global Select
MarketSM under the symbol LRCX. Lam Research is a NASDAQ-100(R)
company.
This release contains forward-looking statements and
projections. Forward-looking statements and projections can often
be identified by the use of forward-looking words such as “expect,”
“may,” “will,” “could,” “believe,” “anticipate,” “estimate,”
“continue,” “plan,” “intend,” “project” or other similar
expressions to identify such forward-looking statements. Undue
reliance should not be placed on such forward-looking statements
and projections, which speak only as of the date they are made. Lam
Research undertakes no obligation to update such forward-looking
statements. Actual events and results may differ materially from
those in the forward-looking statements and are subject to risks
and uncertainties. Such risks and uncertainties include, but are
not limited to, whether or not Lam Research will offer the notes or
consummate the offering, the anticipated terms of the notes and the
offering, the anticipated use of the proceeds of the offering and
whether the convertible note hedge and warrant transactions will
become effective.
Lam Research (NASDAQ:LRCX)
Historical Stock Chart
From May 2024 to Jun 2024
Lam Research (NASDAQ:LRCX)
Historical Stock Chart
From Jun 2023 to Jun 2024