Komag $70 million convertible talked at 2.5-3.0% yield, up 28-32%

By Ronda Fears

Nashville, Jan. 16 - Price talk emerged Friday for Komag Inc.'s $70 million of 20-year convertible notes, putting the yield at 2.5% to 3.0% and initial conversion premium between 28% and 32%.

Pricing is scheduled for after the market close Wednesday.

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

The 20-year notes will be non-callable for three years with puts in years seven, 10 and 15.

San Jose, Calif.-based Komag, which manufactures and markets thin-film media disks that are incorporated into disk drives, also plans to sell 6 million shares of common stock.

Joint lead manager is U.S. Bancorp Piper Jaffray Inc. Co-managers are Needham & Co. Inc. and Thomas Weisel Partners LLC.

Proceeds are earmarked to redeem $114 million outstanding of senior secured notes due 2007 and for general corporate purposes.

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