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Lam Research offers $700 million five-year, seven-year convertibles
By Rebecca Melvin
New York, May 5 - Lam Research Corp. plans to price $700 million of convertible senior notes in two tranches, including a $350 million five-year tranche talked to yield 0.5% to 1% and a $350 million seven-year tranche to yield 1.25% to 1.75%. Both tranches are talked with an initial conversion premium of 27.5% to 32.5%, a syndicate source said early Thursday.
Pricing of the Rule 144A deal was expected after the market close Thursday.
Both tranches have a $50 million greenshoe.
A portion of the proceeds will be used to repurchase a minimum of 1 million shares of common stock and up to 3 million shares of common stock from initial purchasers of the notes in privately negotiated transactions.
The price of the common stock repurchased is expected to equal the closing price per share on Thursday.
Following the offering, Lam Research may from time to time repurchase additional shares of common stock under its stock repurchase program.
In connection with the pricing, Lam Research expects to enter into privately negotiated convertible note hedge and warrant transactions with initial purchasers or affiliates. A portion of the proceeds will be used to pay the cost of the convertible note hedge transactions.
The balance of the proceeds will 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 common stock under its share repurchase program.
Lam Research is a Fremont, Calif.-based semiconductor equipment company.
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