Rambus Announces Pricing of $150 Million Convertible Senior Notes Offering
November 15 2017 - 2:00AM
Business Wire
Rambus Inc. (NASDAQ: RMBS) today announced the pricing of its
offering of $150 million aggregate principal amount of its 1.375%
Convertible Senior Notes due 2023 (the “notes”) in a private
placement to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Act”). Rambus
has granted the initial purchasers a 13-day option to purchase up
to an additional $22.5 million aggregate principal amount of the
notes on the same terms and conditions to cover over-allotments, if
any. The offering is expected to close on November 17, 2017,
subject to satisfaction of customary closing conditions.
The notes will be unsecured, unsubordinated obligations of
Rambus. Interest on the notes will be paid semi-annually at a rate
of 1.375% per annum, and the notes will mature on February 1, 2023,
unless earlier repurchased or converted. Holders may require Rambus
to repurchase their notes upon the occurrence of certain events
that constitute a fundamental change under the indenture governing
the notes at a purchase price equal to the principal amount thereof
plus accrued and unpaid interest to, but excluding, the repurchase
date. Rambus may not redeem the notes prior to maturity.
Prior to November 1, 2022, the notes will be convertible at the
option of the holders only during certain periods upon the
occurrence of specified events, and thereafter until the close of
business on the second scheduled trading day immediately preceding
the maturity date, the notes will be convertible at the option of
the holders at any time. The notes will be convertible, subject to
certain conditions, into cash up to the aggregate principal amount
of the notes to be converted, and any excess conversion value will
be convertible into cash, shares of Rambus’ common stock (the
“common stock”) or a combination of cash and shares of common
stock, at Rambus’ election. The initial conversion rate will be
52.8318 shares of common stock per $1,000 principal amount of
notes, which is equivalent to an initial conversion price of
approximately $18.93 per share of common stock, subject to
adjustment in certain circumstances. This initial conversion price
represents a premium of approximately 30% relative to the last
reported sale price of Rambus’ common stock of $14.56 per share on
November 14, 2017.
Rambus intends to use a portion of the net proceeds of the
offering of the notes to pay the cost of the convertible note hedge
transactions described below (after such cost is partially offset
by the proceeds to Rambus of the warrant transactions described
below) and to use the remaining proceeds of the offering for (i)
the repurchase of approximately $56.8 million aggregate principal
amount of Rambus’ 1.125% convertible senior notes due 2018 (the
“2018 Notes”) concurrently with the offering of the notes, through
one of the initial purchasers of the notes or its affiliates in
individually negotiated transactions and (ii) general corporate
purposes.
In connection with the pricing of the notes, Rambus entered into
convertible note hedge transactions with one or more of the initial
purchasers or their affiliates and other financial institutions
(the “option counterparties”). The convertible note hedge
transactions are generally expected to reduce potential dilution to
the common stock upon any conversion of notes and/or offset any
cash payments Rambus is required to make in excess of the principal
amount of converted notes, as the case may be. However, the warrant
transactions would separately have a dilutive effect to the extent
that the market value per share of the common stock exceeds the
strike price of any warrants. The strike price of the warrant
transactions will initially be approximately $23.30 per share,
which represents a premium of 60% over the last reported sale price
of the common stock on November 14, 2017, and is subject to certain
adjustments under the terms of the warrant transactions. If the
initial purchasers exercise their over-allotment option to purchase
additional notes, Rambus may enter into additional convertible note
hedge and additional warrant transactions relating to the
additional notes.
In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, the option
counterparties or their respective affiliates expect to purchase
shares of the common stock and/or enter into various derivative
transactions with respect to the common stock concurrently with or
shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of the common stock or the notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the common stock
and/or purchasing or selling the common stock or other securities
of Rambus 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 or in connection with any repurchase of notes by Rambus).
This activity could also cause or avoid an increase or a decrease
in the market price of the common stock or the notes, which could
affect the ability of noteholders to convert the notes and, to the
extent the activity occurs during any observation period related to
a conversion of notes, it could affect the amount and value of the
consideration that noteholders will receive upon conversion of such
notes. The convertible note hedge transactions and warrant
transactions have not been, and will not be, registered under the
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 such registration requirements.
In connection with the purchase of the 2018 Notes, Rambus
expects that holders of the 2018 Notes submitting their 2018 Notes
for repurchase may purchase shares of common stock to close out
their hedge positions with respect to the 2018 Notes, which
activity may increase the market price of the common stock.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation, or sale in any jurisdiction in which such
offer, solicitation, or sale is unlawful. Any offer of the
securities will be made only by means of a private offering
memorandum. The notes and the shares of common stock issuable upon
conversion of the notes, if any, will not be registered under the
Act or any state securities laws, and unless so registered, 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 laws.
Source: Rambus Inc.
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version on businesswire.com: http://www.businesswire.com/news/home/20171114006809/en/
Rambus Investor RelationsNicole Noutsios,
510-315-1003Nicole@nmnadvisors.com
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