Komag $70 million convertible offering slated for Jan. 21

By Ronda Fears

Nashville, Jan. 13 - Komag Inc.'s $70 million offering of convertible notes has been scheduled for pricing on Jan. 21, according to a source working on the deal. Indicative terms, however, may not emerge until late this week or next week.

The registered deal has been changed to seven-year notes that are non-callable for three years. When the registration was filed at the Securities and Exchange Commission, the company was contemplating 20-year notes with seven years of call protection and puts in years seven, 10 and 15.

Komag also plans to sell 6 million shares of common stock.

Bear Stearns & Co. Inc. is sole bookrunner of the deal.

Joint lead manager is U.S. Bancorp Piper Jaffray Inc.

Co-managers are Needham & Co. Inc. and Thomas Weisel Partners LLC.

San Jose, Calif.-based Komag, which manufactures and markets thin-film media disks that are incorporated into disk drives, has earmarked proceeds to redeem $114 million of outstanding senior secured notes due 2007 and for general corporate purposes.

Komag shares closed Tuesday up 68 cents, or 3.25%, to $21.63.

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