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Komag could retire its 2.125% convertibles
By Susanna Moon
Chicago, June 28 - Komag, Inc. said that it expects to retire its $250 million convertible notes due 2014.
The redemption, along with the acquisition of Komag, will be funded with cash and proceeds from a senior secured term loan of up to $1.25 billion.
Komag announced that it signed a definitive agreement with Western Digital Corp. to be acquired for $1 billion or $32.25 in cash per share.
Komag priced $220 million seven-year convertible notes March 22 after the market closed with a coupon of 2.125% and initial conversion premium of 77%. The $30 million greenshoe was subsequently exercised.
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.
Komag is a San Jose, Calif.-based data storage device maker.
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