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Massey 3.25% convertible holders get change-of-control put option
By Angela McDaniels
Tacoma, Wash., June 6 - Massey Energy Co.'s 3.25% convertible senior notes due 2015 are putable due to a fundamental change, which occurred on June 1 when the company was acquired by Alpha Natural Resources, Inc.
Massey Energy is now Alpha Appalachia Holdings, Inc., a subsidiary of Alpha Natural Resources.
Holders have until the close of business on June 24 to exercise their put options, and the repurchase date is expected to be June 27. They will receive par plus accrued interest, according to a company news release.
The conversion ratio prior to the merger was 11.4542 shares of Massey Energy Stock per $1,000 principal amount of notes. As a result of the fundamental change, a previously deferred adjustment was applied, resulting in a new conversion ratio of 11.4560.
As a result of the new conversion ratio, the notes will be convertible into 11.7424 shares of Alpha Natural Resources common stock and $114.56 in cash per $1,000 principal amount of notes, without taking the make-whole increase into account.
During the make-whole conversion period, the conversion ratio will be increased by 4.7789 shares, resulting in an adjusted conversion ratio of 16.2349 shares per $1,000 principal amount.
During the make-whole conversion period, the notes will be convertible into 16.6408 shares of Alpha Natural Resources common stock and $162.35 in cash per $1,000 principal amount of the notes.
Alpha Natural Resources' stock closed at $48.47 (NYSE: ANR) on June 6.
The make-whole conversion period began June 1 and will end on the earlier of the date that is 41 business day after June 1 and the date on which the company repurchases the convertibles, if any, that are put back.
Wilmington Trust Co. is the paying agent and the conversion agent.
The coal companies are based in Abingdon, Va.
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