Take-Two gives results of tender for Zynga’s 0.25%, 0% convertibles

By Wendy Van Sickle

Columbus, Ohio, June 23 – Take-Two Interactive Software, Inc. announced the expiration and final results of wholly owned subsidiary Zynga Inc.’s tender offers to repurchase any and all of its outstanding 0.25% convertible senior notes due 2024 and 0% convertible senior notes due 2026, according to a news release on Thursday.

The tender offers were announced on May 23 and were required to be made as a result of the transactions consummated on May 23 that saw Take-Two acquire Zynga, which constituted a fundamental change.

As of the expiration of the offers at 5 p.m. ET on June 22, $266,000, or 0.039%, of the outstanding 2024 notes, and $845,142,000, or 96.64%, of the outstanding 2026 notes had been validly tendered.

The repurchase price was par plus, in the case of the 2024 notes, accrued interest to the repurchase date.

Holders also had the right to convert their notes until June 22 into units of reference property equal to the consideration paid to holders of the old Zynga common stock in the combination of $3.50 in cash and 0.0406 shares of Take-Two common stock per share.

During this fundamental change conversion period, $668,315,000, or 96.86%, of the 2024 notes and no 2026 notes were surrendered for conversion.

During the fundamental change conversion period, the conversion rate for the 2024 notes was 137.3699, which includes a make-whole based on the average last reported sales prices of old Zynga’s common stock over the five trading-day period ended on May 20, and as a result, each $1,000 principal amount of 2024 notes will be convertible into 5.5772 shares of Take-Two common stock, with cash paid in lieu of the fractional shares, and $480.79 in cash.

During the same period, the conversion rate for the 2026 notes was 76.5404, and as a result, each $1,000 principal amount of 2026 notes will be convertible into 3.1075 shares of Take-Two common stock, with cash paid in lieu of any such fractional shares, and $267.89 in cash.

Holders of the 2026 notes were entitled to an increase in the conversion rate because the average last reported sales prices of old Zynga’s common stock over the five trading-day period ended on May 20 was less than the minimum price per share that is required for holders to be entitled to receive an increase in the conversion rate.

After settlement of all notes surrendered for conversion and repurchase, $21,419,000 of the 2024 notes and $29,358,000 of the 2026 notes will remain outstanding.

Computershare Trust Co., NA is the trustee, paying agent and conversion agent.

New York-based Take-Two and San Francisco-based Zynga are developers of interactive and mobile entertainment.

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