Nuance, Shutterfly slip on hedge on takeout chatter; newer deals Dominion, AmSurg in trade

By Rebecca Melvin

New York, July 2 – Nuance Communications Inc.’s convertibles traded actively, but contracted on a hedged basis on Wednesday, amid ongoing speculation of a potential takeout for the Burlington, Mass.-based speech-recognition software company, a New York-based trader said.

The Nuance 2.75% convertibles slipped about 0.5 point on hedge during the session and has contracted about 3 points on delta over the past month, the trader said.

Shutterfly Inc.’s 0.25% convertibles due 2018 bumped up on an outright basis but were also lower on a hedged basis after a report that the Redwood City, Calif.-based online photography company is seeking potential buyers for itself.

The Nuance bonds traded right around par, and the Shutterfly bonds rose on an outright basis to about 105 from the 99 context, according to Trace data.

Elsewhere, Dominion Resources Inc. and AmSurg Corp., two of last week’s new issues, traded pretty actively and looked to be at levels that were in line, or flat, on a dollar-neutral basis.

Near the end of the session, the Dominion 6.375% mandatory convertibles, which have a $50.00 par, were quoted at $51.25 bid, $51.75 offered versus a share price of $69.63, according to a New York-based sellsider.

The Dominion units were being traded on a 65% delta hedge, the sellsider said.

AmSurg’s 5.25% convertible mandatory preferreds were also trading and seen at 103 bid, 103.75 offered versus a share price of $47.47.

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