Emulex’s 1.75% notes are convertible into cash only following merger

By Toni Weeks

San Luis Obispo, Calif., May 5 – Emulex Corp. entered into a supplemental indenture in relation to its merger with Avago Technologies Wireless (USA) Manufacturing Inc. to amend the Nov. 18, 2013 indenture governing its $175 million of 1.75% five-year convertible senior notes, according to an 8-K filing with the Securities and Exchange Commission.

The supplemental indenture provides that the notes are now convertible only into the right to receive the amount of cash that a holder of a number of shares equal to the conversion rate immediately prior to the closing of the merger would have owned or been entitled to receive upon the merger.

When the notes were issued, the initial conversion rate was 97.1322 shares of common stock per each $1,000 principal amount of notes, equal to an initial conversion rate price of $10.30 per share, a 32.5% premium over the Nov. 12, 2013 closing share price of $7.77.

Avago paid $8.00 per share for Emulex.

Costa Mesa, Calif.-based Emulex is focused on network connectivity, monitoring and management for networks that support enterprise, cloud, government and telecommunications.

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