Komag greenshoe exercised, raising 2.125% convertibles to $250 million

By Angela McDaniels

Seattle, March 28 - Komag Inc. said the underwriter of its recent offering of 2.125% convertible senior subordinated notes due 2014 exercised its $30 million over-allotment option in full, raising the size of the deal to $250 million.

The company priced $220 million of the convertibles at par with a conversion premium of 77% and a conversion price of $58.00 via Credit Suisse after the close on March 22.

The offering was upsized to $220 million from $200 million, and revised talk put the coupon at 2.125% to 2.375% and the conversion premium at 75% to 77%, which was tightened from original price talk of a coupon of 2.375% to 2.875% and an initial conversion premium of 73% to 77%.

The issue includes embedded warrants equal to 0.75 times the number of underlying shares. If, at the time of conversion, the applicable price of Komag stock exceeds the base conversion price, holders will receive up to an additional 13.2836 shares per note.

The San Jose, Calif., data storage device maker said it plans to use proceeds to repurchase common stock in connection with this offering, to redeem its 2% convertible subordinated notes due 2024 and for general corporate purposes, which may include additional stock buybacks.

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