Massey discloses pricing formula in tender for 4.75% convertibles

New York, Nov. 23 - Massey Energy Co. revealed the formula that will be used to price its tender offer for its $132.0 million of 4.75% convertible senior notes due 2023 in an SC-TO filing with the Securities and Exchange Commission.

The price will be 51.573 times the weighted average price of its common stock from Dec. 5 through the pricing date plus $160.00, with a minimum of $1,449.33 and a maximum of $2,738.65 per $1,000 principal amount. Pricing will be set after the close on Dec. 20.

Massey will also pay accrued interest up to but excluding the date of purchase.

The tender for the convertibles ends at 5 p.m. ET on Dec. 22.

The tender for the 4.75% convertibles is subject to the receipt of proceeds from a sale of new notes and at least 80% of the 2.25% convertibles being exchanged.

Massey previously said it was tendered for the notes as part of a capital restructuring that also includes a cash tender offer for its $220.1 million of 6.95% senior notes due 2007 and a cash-and-stock exchange for its $175.0 million of 2.25% convertible senior notes due 2024.

The Richmond, Va., coal miner will sell $725 million principal amount of new senior notes to fund the transactions.

As previously announced, the tender payment on offer for the 6.95% notes will be set as the present value of the future principal and interest payments on the notes minus accrued interest up to but excluding the date of purchase.

Holders who tender by the consent deadline of 5 p.m. ET on Dec. 6 will receive the full amount. After that deadline but before the expiration of midnight ET on Dec. 20 the sum will be less the $15.00 per $1,000 consent payment.

Massey is also soliciting consents to amend the note indenture to reduce the minimum required notice period for a call to three days from 30. If Massey completes the tender and receives the necessary consents, it plans to redeem the notes after the tender offer finishes.

The tender for the 6.95% notes is subject to the receipt of proceeds from the new notes and the consent of holders of a majority of the notes.

In the exchange for the 2.25% convertibles, Massey is offering 29.7619 shares plus $230.00 in cash per $1,000 principal amount. Massey will also pay accrued interest up to but excluding the date of exchange.

The exchange for the convertibles ends at 5 p.m. ET on Dec. 22.

The exchange for the 2.25% convertibles is subject to the receipt of proceeds from the new notes.

UBS Investment Bank is dealer manager for the tender offers (888 722-9555 ext. 4210 or 203 719-4210). Global Bondholder Services Corp. is exchange agent for the exchange offer (866 924-2200 or 212 430-3774). Global Bondholder Services is also information agent for all the offers.

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