Western Digital converts 99% of SanDisk 1.5% convertibles, 96% of 0.5% convertibles

New York, June 13 – Western Digital Corp. said that holders of $996 million, or 99%, of the 1.5% convertible senior notes due 2017 issued by subsidiary SanDisk Corp. and $1,438,000,000, or 96%, of SanDisk’s 0.5% convertible senior notes due 2020 converted their notes at the temporarily increased conversion ratio.

In addition, holders of $100,000 of the 1.5% convertibles and $2,000 of the 0.5% convertibles tendered their notes at par plus accrued interest using the a change-of-control put provision that allows the notes to be put at par on June 10.

As previously announced, the conversion rate on the notes increased after Western Digital acquired SanDisk because the transaction triggered the fundamental change provision in the note indenture.

Through June 9, the conversion rate for each $1,000 of principal amount of SanDisk notes increased by 1.0702 additional units of reference property to a total of 20.8004 units for the 1.5% convertibles and 2.8720 additional units for the 0.5% convertibles to a total of 13.7726 units.

Each unit of reference property was equal to the consideration paid for one share of SanDisk common stock in the merger, which was $67.50 and 0.2387 share of Western Digital common stock.

All the conversions will be net share settled, according to a news release.

The number of shares to be issued will be determined during a 20-day observation period. Using the June 9 closing stock price of $48.17, the consideration would be 2.3 million shares and $3.1 billion in cash.

The conversion rate has now reverted to 19.7302 units, or 4.7096 shares of Western Digital common stock and $1,331.79 per $1,000 principal amount, for the 1.5% convertibles and 10.9006 units, or 2.6020 shares of Western Digital common stock and $735.79 per $1,000 principal amount, for the 0.5% convertibles. The 0.5% convertibles are not currently convertible.

Western Digital, an Irvine, Calif.-based maker of storage solutions for digital content, agreed to purchase SanDisk, a Milpitas, Calif.-based maker of flash storage cards, for $86.50 per share, or a total equity value of about $19 billion.

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