Morning Commentary: Spectranetics being bought by Philips, convertibles fly higher; Microchip eyed

By Stephanie N. Rotondo

Seattle, June 28 – Spectranetics Corp.’s 2.625% convertible notes due 2034 got a sizable pop on Wednesday on news that the medical device maker is being acquired by Philips NV.

A market source saw the convertibles in a 135 to 135.5 range, which compared to levels around 118.25 on Monday.

The issue easily dominated early trading volumes, the source noted.

The company’s stock was also on a tear, jumping over 26% by mid-morning.

Philips, which has been moving towards a healthcare focus of late, will pay $2.16 billion, or $38.50 a share, for Spectranetics. That amounted to a 27% premium over Tuesday’s closing share price.

Spectranetics specializes in devices used to treat heart disease. The acquisition will improve Philips’ position in the vascular realm, given its early 2015 purchase of Volcano, a vascular imaging company.

Meanwhile, Microchip Technology Inc.’s were on the active side. However, the bonds were trending slightly weaker at mid-morning, even as the underlying equity was showing modest gains.

The 1.625% convertible notes due 2027 were trading just south of 107 in early dealings against a stock price of $78.72. The 2.25% convertible notes due 2037 were seen at 106 bid, 106.5 offered, down about ½ point.

The company’s equity was up 36 cents at $79.07 at mid-morning.

There was no fresh news out on the Chandler, Ariz.-based company to cause the movements in the securities.

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