Alcoa seen at par in the gray market; TiVo’s new deal looks fair;’ Endo bids for Auxilium

By Rebecca Melvin

New York, Sept. 16 – Two planned deals pricing after the market close, including Alcoa Inc.’s $1.25 billion of mandatories and TiVo Inc.’s $200 million of seven-year convertibles, were pretty much the focus of Tuesday’s convertibles session.

There was weakness across the board in the secondary market, but not trading, as market players freed up some space for the day’s new deals and anticipated deals, a New York-based trader said.

Alcoa’s planned $1.25 billion of three-year mandatory convertible preferreds was said to have repriced toward the cheap end of initial talk, or closer to a 5.5% coupon and 20% initial conversion premium, compared to initial talk of 5% to 5.5% coupon and 20% to 25% premium; but revised talk couldn’t be confirmed with syndicate sources.

The Alcoa mandatories were seen in the gray market at their issue price of $50.00.

The new TiVo deal looked right around fair value or a tad higher, two sources said. But there was no gray market in the new TiVo deal.

“It sounds like they should come at the cheap end or the mids,” an East Coast-based buysider said of the new TiVo.

After the market close, market players took note of news that Endo International plc proposes to acquire all the outstanding shares of Auxilium Pharmaceuticals Inc. for a per share amount of $28.10 in cash and stock.

Endo’s proposal represents a premium of 31% to Auxilium’s closing share price Tuesday.

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