Zarlink Semiconductor to buy back up to C$7.08 million 6% convertibles

By Melissa Kory

Cleveland, Nov. 23 - Zarlink Semiconductor Inc. said the Toronto Stock Exchange approved its notice of intention to make a normal course issuer bid permitting it to repurchase for cancellation up to C$7,076,400, or 10%, of its C$70,764,000 6% convertible subordinated debentures. The action restarts purchases after a previous program expired.

The company may purchase the convertibles at prevailing market prices from Nov. 25 to Nov. 24, 2011, according to a company news release.

Zarlink said it plans to fund the purchases out of available cash.

The average daily trading volume of Zarlink's convertibles over the last six complete calendar months was C$298,816. Under the exchange rules, Zarlink may purchase up to 25% of that amount, or $74,704, per trading day.

As of Nov. 15, there was C$70,864,000 of the convertible debentures outstanding.

The company said its managers believe that at times the market price of the convertible debentures may not fully reflect the underlying value of the notes and that it is in the best interests of Zarlink to purchase them.

Under Zarlink's previous normal course issuer bid for the debentures from Nov. 3, 2009, to Nov. 2 of this year, no debentures were repurchased.

American Appraisal Canada Inc. prepared a valuation report for Zarlink's formal issuer bid launched on June 8, 2009 under which it purchased $21,000 principal amount of the convertibles. The fair market value of the convertible debentures, as of May 18, 2009, falls within the range of $51.10 to $58.60 per $100 principal amount.

Zarlink is an Ottawa company that designs, manufactures and distributes semiconductors in Europe, Asia Pacific, the United States and Canada.

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