Cell Genesys starts Dutch auction tender for $80 million 3.125% convertibles

By Jennifer Chiou

New York, Oct. 24 - Cell Genesys Inc. announced the start of a modified Dutch auction tender offer for up to $80 million, or about 67%, of its 3.125% seven-year convertible notes.

The company is offering to purchase the notes for cash at a price not greater than $400 nor less than $320 per $1,000 principal amount, plus accrued interest.

The offer ends at 5 p.m. ET on Dec. 9.

On Oct. 24, Cell Genesys said it repurchased $26.3 million of the notes at an overall discount of 60% from face value for $10.5 million in cash plus accrued interest. The San Francisco-based company said that the buybacks were made up of a series of privately negotiated transactions with institutional holders of the notes.

Cell Genesys previously said that this early retirement of debt will result in a net gain of $15.8 million in the fourth quarter of 2008 and a reduction of annualized interest expense by $800,000.

The company said that $118.7 million of the notes remains outstanding.

The tender offer is not conditioned upon any minimum being tendered.

The dealer manager is Lazard Capital Markets LLC. The depositary is U.S. Bank NA and the information agent is Georgeson Inc. (call 866 206-4938 or call collect 212 440-9800).

Cell Genesys develops treatments for cancer.

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