DOW JONES NEWSWIRES
Micron Technology Inc. (MU) on Tuesday launched a $450 million
offering of common stock and convertible notes, as the chip maker
looks to raise cash as global demand continues to slump.
Micron has suffered along with foreign rivals from oversupply in
memory chips, used in everything from computers to iPods to digital
cameras. Cuts in manufacturing capacity across the sector have
helped stabilize prices recently, but demand remains depressed.
Based on the closing price of Micron's common stock of $4.52 as
of April 6, the company expects the gross proceeds from the stock
portion to be about $250 million.
Micron also intends to offer $200 million aggregate principal
amount of convertible senior notes due Oct. 15, 2013, in a
concurrent underwritten registered public offering. The company
said it plans to grant the underwriters an over-allotment option
with respect to an additional $30 million of the notes.
Micron will use some of the proceeds to fund capped-call
transactions aimed at increasing or preventing a decline in the
price of Micron common stock after the note offering.
The remaining proceeds will be used for working capital, capital
expenditures and other transactions.
The company filed with the Securities and Exchange Commission to
sell 55.3 million common shares, with an over-allotment option for
an additional 8.3 million.
Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) are acting
as joint book-running managers for the offerings and Deutsche Bank
AG (DB) is acting as co-manager of the offerings.
In February, Micron reported its fiscal second-quarter net loss
narrowed on lower charges, but revenue dropped. For the third
consecutive quarter, Micron's gross margin was negative as the cost
of producing chips exceeded their selling price.
Shares were down 2.6% to $4.20 in after-hours trading.
-By John Kell, Dow Jones Newswires, 201-938-5285, john.kell@dowjones.com