Twitter, Salesforce convertibles reverse courses as takeover talk eyed; Medicines retreats

By Stephanie N. Rotondo

Seattle, Oct. 6 – Twitter Inc. and Salesforce.com remained notable on Thursday as investors continued to react to takeover speculation.

On Tuesday, it was reported that Salesforce.com – along with Google and Disney, among others – was considering making a bid for the social media company. Come Wednesday, Twitter’s convertible debt – and equity – improved, while Salesforce took a beating.

Early Thursday, however, news outlets were reporting that Google, Disney and Apple were no longer interested in buying Twitter. There were also some indications that Salesforce.com’s enthusiasm for such a deal was waning.

As a result, Twitter was trading off and Salesforce.com was recouping its previous losses.

Twitter’s 1% convertible notes due 2021 traded down to 93 versus previous levels around 96. The 0.25% convertible notes due 2019 declined to 94.625 from 96.5.

The equity was meantime down over 18% in early trading, ultimately closing off $5.00, or 20.1%, to $19.87.

As for Salesforce.com, its 0.25% convertible notes due 2018 jumped to a 119.875 to 120.25 context from levels in a range of 116 to 117 on Wednesday. The stock was up $2.84, or 4.15%, at $71.26.

Salesforce.com, as well as Disney, have reportedly retained bankers to put together a bid for Twitter. Any deal that might emerge – which could happen as early as this week or in the next couple of weeks – is expected to be valued around $30 billion.

Also on the radar were the Medicines Co.’s convertible bonds, which took a beating as yet another drugmaker suspended the development of a new drug.

This time, however, the drugmaker was a partner of Medicines.

Medicines debt drops

Medicines’ convertible debt took a downward turn on Thursday in the wake of news that its partner, Alnylam Pharmaceuticals, was suspending the development of its resuviran drug.

The 2.75% convertible notes due 2023 opened near 99 but was placed at 96 at mid-morning versus a stock price of $33.25.

“The stock is down $5,” a trader noted.

At the bell, the notes were pegged around 98, down about 5.5 points outright.

As for the 2.5% convertible notes due 2022, they declined 7 points to 123.5. The 1.375% convertible notes due 2017 took the biggest hit, falling over 9 points to 138.5.

The equity underlying the debt fell in tandem, dropping $3.18, or 8.26%, to $35.33.

Alnylam said late Wednesday that it was halting trials of its experimental therapy for a rare genetic condition that can cause heart failure, as late-stage studies indicated those who took the therapy died more often than those who took placebos.

Medicines is partnered with Alnylam on another drug, PCSK9si, though so far that treatment has not shown any serious side effects.

Still, the market is showing signs of concern, given that the cholesterol-lowering medication uses a similar platform to resuviran.

It should be noted, however, that the deaths Alnylam reported – 18 to be exact – were not classified as related to the drug, meaning they could be due to the disorder the medicine is trying to treat.

Medicines will make a presentation on its phase 2 trial findings in November.

Mentioned in this article:

The Medicines Co. Nasdaq: MDCO

Twitter Inc. NYSE: TWTR

Salesforce.com NYSE: CRM

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