Kinetic Concepts sets payout for put option on 3.25% convertibles

By Jennifer Chiou

New York, Nov. 11 - Kinetic Concepts, Inc. announced that it will pay $1,003.97, including accrued interest, for each $1,000 principal amount of 3.25% convertible senior notes due 2015 put back to the company.

As announced earlier this month, the notes became convertible beginning on Nov. 4 in connection with the merger of Chiron Merger Sub, Inc., a wholly owned subsidiary of Chiron Holdings, Inc., into Kinetic Concepts.

The transaction constituted a make-whole fundamental change under the indenture governing the senior notes. The merger was first announced in July.

Holders have the option of requiring the company to repurchase all or a portion of their notes on the fundamental change purchase date of Nov. 30 at par plus accrued interest. Holders who exercise this right will not be allowed to convert their notes.

Under the terms of the indenture, there will be a make-whole adjustment to the conversion rate. Using Nov. 4 as the closing date of the merger and a merger consideration of $68.50 per share, to which holders of Kinetic Concepts' common stock were entitled, the conversion rate will be increased by 1.7834 shares of common stock per $1,000 principal amount of notes.

The notes remain convertible until 5 p.m. ET on Nov. 29.

The paying and conversion agent is U.S. Bank NA (attn: specialized finance; 800 934-6802).

Kinetic Concepts is a San Antonio-based medical technology company. The company's shares (NYSE:KCI) last closed at $68.47 apiece on Nov. 4.

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