Charles River Laboratories to Offer $300 Million Convertible Senior Notes; Company Intends to Repurchase Approximately $125 Mil
June 05 2006 - 7:04PM
Business Wire
Charles River Laboratories International, Inc. (NYSE: CRL), today
announced its intention to offer, subject to market and other
conditions, $300 million principal amount of Convertible Senior
Notes due 2013 in a private offering to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended. In certain circumstances, the notes may be convertible
into cash up to the principal amount and any conversion value above
the principal amount may be convertible into cash, shares of
Charles River common stock or a combination of cash and Charles
River common stock, at Charles River's option. The interest rate,
conversion price and other terms of the notes will be determined by
negotiations between Charles River and the initial purchasers of
the notes. Charles River expects to grant the initial purchasers a
13-day option to purchase up to $50 million principal amount of
additional notes to cover over-allotments. Charles River intends to
use a portion of the net proceeds of this offering to repurchase
approximately $125 million of its common stock in negotiated
transactions from purchasers of the notes concurrently with the
offering. If the initial purchasers exercise their option to
purchase additional notes, Charles River may use a portion of the
net proceeds from the sale of the additional notes to repurchase
additional shares of its common stock. In addition, Charles River
intends to use a portion of the net proceeds of the offering to pay
the net cost of the convertible note hedge and warrant transactions
that it expects to enter into concurrently with the offering. If
the initial purchasers exercise their option to purchase additional
notes, Charles River expects to use a portion of the net proceeds
from the sale of the additional notes to enter into additional
convertible note hedge transactions. Charles River may also enter
into additional warrant transactions. Charles River intends to use
the remainder of the net proceeds from this offering for general
corporate purposes, including repurchasing shares of Charles River
common stock in the open market from time to time, which may be
made pursuant to an accelerated share repurchase program. In
connection with establishing their initial hedge of the convertible
note hedge and warrant transactions, Charles River has been advised
that the other parties to such transactions or their respective
affiliates expect to enter into various derivative transactions
with respect to Charles River's common stock and/or purchase
Charles River's common stock in secondary market transactions prior
to or concurrently with pricing of the notes, and may enter into
various derivative transactions with respect to Charles River's
common stock and/or purchase or sell Charles River's common stock
in secondary market transactions following pricing of the notes.
This notice does not constitute an offer to sell or a solicitation
of an offer to buy securities. Any offers of the securities will be
made only by means of a private offering memorandum. The notes and
Charles River common stock issuable upon the conversion of the
notes have not been 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. Caution Concerning
Forward-Looking Statements. This news release includes
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"anticipate," "believe," "expect," "will," "may," "estimate,"
"plan," "outlook," and "project" and other similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. Forward-looking statements,
including the statements in this notice regarding Charles River's
expectation to sell notes, repurchase shares of its common stock
and enter into convertible note hedge and warrant transactions, are
subject to risks and uncertainties. Charles River cannot guarantee
that any of these transactions will occur. Forward-looking
statements are based on Charles River's current expectations and
beliefs, and involve a number of risks and uncertainties that are
difficult to predict and that could cause actual results to differ
materially from those stated or implied by the forward-looking
statements. About Charles River Laboratories Charles River
Laboratories, based in Wilmington, Massachusetts, is a global
provider of solutions that advance the drug discovery and
development process.
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