Chemed Corporation Announces Pricing of Offering of $180 Million Senior Convertible Notes
May 09 2007 - 9:18AM
Business Wire
Chemed Corporation �Chemed� (NYSE:CHE) today announced the pricing
of its $180 million aggregate principal amount of senior
convertible notes due 2014 (the �Notes�) in a private offering to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the �Securities Act�). The
Company also granted the initial purchasers an option to purchase
an additional $20 million aggregate principal amount of such Notes.
Subject to customary conditions, the offering is expected to close
on May 14, 2007. The Notes will be unsecured, unsubordinated
obligations of the Company, will pay interest semi-annually at a
rate of 1.875% per annum, and will be convertible upon satisfaction
of certain conditions. The Notes will be convertible into cash up
to the principal amount of the Notes and, with respect to any
excess conversion value, into shares of the Company's capital
stock. The Notes will have an initial conversion rate of 12.3874
shares of capital stock per $1,000 principal amount of the Notes.
This represents an initial conversion price (which is subject to
adjustment in certain circumstances) of approximately $80.73 per
share, representing a 22.5% conversion premium based on the closing
price of $65.90 per share on May 8, 2007. Holders of the Notes will
have the right to require the Company to repurchase for cash all or
some of their Notes upon the occurrence of certain events. The
Company estimates that the net proceeds from the offering will be
approximately $174 million, after deducting estimated discounts and
expenses. The Notes will mature on May 15, 2014. In connection with
the offering, the Company has entered into convertible note hedge
transactions with affiliates of the initial purchasers of the Notes
(the �hedge counterparties�) and intends to use a portion of the
net proceeds from this offering to pay for the cost of the
convertible note hedge transactions. The Company has also entered
into separate warrant transactions with the hedge counterparties,
which have partially offset the cost of the convertible note hedge
transactions. The convertible note hedge and warrant transactions
increase the effective conversion price of the notes to over
$105.00 per common share. In connection with the convertible note
hedge and warrant transactions, the hedge counterparties have
advised the Company that they or their affiliates expect to enter
into various derivative transactions with respect to the capital
stock of the Company, concurrently with or shortly following
pricing of the Notes. These activities could have the effect of
increasing or preventing a decline in the price of the capital
stock of the Company concurrently or following the pricing of the
Notes. In addition, the hedge counterparties or their affiliates
may from time to time, following the pricing of the Notes, enter
into or unwind various derivative transactions with respect to the
capital stock of the Company and/or purchase or sell capital stock
of the Company in secondary market transactions. These activities
could have the effect of decreasing the price of the capital stock
of the Company and could affect the price of the Notes during any
averaging period related to the conversion of Notes. In addition,
concurrent with the issue of the Notes, the Company is repurchasing
approximately 1.3 million shares of its capital stock in negotiated
transactions with institutional investors amounting to
approximately $86 million. The repurchase price of the shares is
$65.90 per share, the closing price of the Company's capital stock
on May 8, 2007. The Company anticipates that approximately $14
million of the remaining net proceeds of the offering will be used
within approximately 30 days after the issue of the Notes for
additional purchases of its capital stock in the open market or in
negotiated transactions. The balance of the net proceeds will be
used to repay borrowings under its revolving credit facility. If
the initial purchasers exercise their over-allotment option, or if
the Company otherwise has proceeds remaining, the Company may use a
portion of the additional net proceeds for general corporate
purposes, or to enter into additional convertible note hedge
transactions, or to repurchase additional shares of its capital
stock in the open market or in negotiated transactions. The Notes
and the shares of capital stock issuable upon conversion of the
Notes 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 the registration requirements of the Securities Act.
This announcement does not constitute an offer to sell or the
solicitation of offers to buy any security and shall not constitute
an offer, solicitation or sale of any security in any jurisdiction
in which such offer, solicitation or sale would be unlawful.
Statements in this press release or in other Chemed communications
may relate to future events or Chemed�s future performance. Such
statements are forward-looking statements and are based on present
information Chemed has related to its existing business
circumstances. Investors are cautioned that such forward-looking
statements are subject to inherent risk that actual results may
differ materially from such forward-looking statements. Further,
investors are cautioned that Chemed does not assume any obligation
to update forward-looking statements based on unanticipated events
or changed expectations.
Chemed (NYSE:CHE)
Historical Stock Chart
From May 2024 to Jun 2024
Chemed (NYSE:CHE)
Historical Stock Chart
From Jun 2023 to Jun 2024