SanDisk mixed on takeout chatter; Cepheid contracts after warning; Amyris offering on tap

By Rebecca Melvin

New York, Oct. 14 – SanDisk Corp. traded mixed in active trade on Wednesday amid speculation that the Milpitas, Calif.-based flash memory chip maker is exploring a possible sale of itself. There was focus in other technology convertible issues, but the session overall was trendless, with trades pertaining to company specific issues, market players said.

The SanDisk 1.5% convertibles moved up strongly on an outright basis, and expanded on a swap basis, and the SanDisk 0.5% convertibles, which were seen as underperforming in the event of a takeout, were higher outright but lower on swap.

“There was some speculation in tech about M&A,” a New York-based trader said.

Cepheid Inc.’s convertibles fell on an outright basis and contracted on a dollar-neutral, or hedged, basis after the Sunnyvale, Calif.-based molecular diagnostic tests company warned that its third-quarter results will fall short of estimates. The shares sank 22%.

Cepheid’s 1.25% convertibles due 2021 were seen trading at about 88.625 versus an underlying share price of $32.45 in the early going, a New York-based trader said.

The bonds came in about a point on a dollar-neutral basis after the negative earnings preannouncement, and hedged players were stepping in at about 88.625, the trader said.

In the primary market, Amyris Inc. launched an offering of $50 million of 3.5-year convertible senior notes that was expected to price on Thursday via Stifel Nicolaus Weisel as the bookrunner.

Price talk for the offering was not immediately available.

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