Millipore holders may convert 3.75% notes following Merck acquisition

By Susanna Moon

Chicago, July 16 - Millipore Corp. announced the make-whole conversion period during which holders may convert the company's 3.75% convertible senior notes due 2026 at a higher conversion rate, triggered by the completion of Merck KGaA's acquisition of the company on Wednesday.

The make-whole conversion period began on June 14 and will end on the later of Aug. 25 and the fundamental change repurchase date, which will be announced within 20 business days of the completion of Wednesday's share exchange.

On July 15, Millipore said it entered into a first supplemental indenture for its 3.75% convertibles following its acquisition via the share exchange.

Merck subsidiary Concord Investments Corp. acquired all of Millipore's shares on Wednesday, and Millipore became a wholly owned subsidiary of Concord.

Under the terms of the supplemental indenture, each $1,000 principal amount of the notes is convertible into an amount in cash equal to $107 - the per-share price paid in the acquisition - multiplied by the conversion rate immediately in place prior to the effective time of the share exchange.

As previously noted, the acquisition was a make-whole fundamental change under the indenture. As a result, the conversion rate will be increased.

Effective Wednesday, the conversion rate was 11.0485 shares per $1,000 principal amount of notes. Holders will now also receive the make-whole increase, which is another 0.7519 of a share per $1,000 principal amount, resulting in an additional cash payment of $80.46.

In total, the conversion rate for notes surrendered during the make-whole conversion period is 11.8004 shares per $1,000 principal amount of notes, for a cash payment of $1,262.64.

Assuming that all noteholders convert their securities during this period, the company will pay $713.39 million.

Millipore is a life science company based in Billerica, Mass. Merck is a pharmaceutical and chemical company based in Darmstadt, Germany.

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