SUNNYVALE, Calif.--(BUSINESS WIRE)--
Rambus Inc. (NASDAQ: RMBS) today announced the pricing of its offering
of $150 million aggregate principal amount of its 1.375% Convertible
Senior Notes due 2023 (the “notes”) in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended (the “Act”). Rambus has granted the initial purchasers
a 13-day option to purchase up to an additional $22.5 million aggregate
principal amount of the notes on the same terms and conditions to cover
over-allotments, if any. The offering is expected to close on November
17, 2017, subject to satisfaction of customary closing conditions.
The notes will be unsecured, unsubordinated obligations of Rambus.
Interest on the notes will be paid semi-annually at a rate of 1.375% per
annum, and the notes will mature on February 1, 2023, unless earlier
repurchased or converted. Holders may require Rambus to repurchase their
notes upon the occurrence of certain events that constitute a
fundamental change under the indenture governing the notes at a purchase
price equal to the principal amount thereof plus accrued and unpaid
interest to, but excluding, the repurchase date. Rambus may not redeem
the notes prior to maturity.
Prior to November 1, 2022, the notes will be convertible at the option
of the holders only during certain periods upon the occurrence of
specified events, and thereafter until the close of business on the
second scheduled trading day immediately preceding the maturity date,
the notes will be convertible at the option of the holders at any time.
The notes will be convertible, subject to certain conditions, into cash
up to the aggregate principal amount of the notes to be converted, and
any excess conversion value will be convertible into cash, shares of
Rambus’ common stock (the “common stock”) or a combination of cash and
shares of common stock, at Rambus’ election. The initial conversion rate
will be 52.8318 shares of common stock per $1,000 principal amount of
notes, which is equivalent to an initial conversion price of
approximately $18.93 per share of common stock, subject to adjustment in
certain circumstances. This initial conversion price represents a
premium of approximately 30% relative to the last reported sale price of
Rambus’ common stock of $14.56 per share on November 14, 2017.
Rambus intends to use a portion of the net proceeds of the offering of
the notes to pay the cost of the convertible note hedge transactions
described below (after such cost is partially offset by the proceeds to
Rambus of the warrant transactions described below) and to use the
remaining proceeds of the offering for (i) the repurchase of
approximately $56.8 million aggregate principal amount of Rambus’ 1.125%
convertible senior notes due 2018 (the “2018 Notes”) concurrently with
the offering of the notes, through one of the initial purchasers of the
notes or its affiliates in individually negotiated transactions and (ii)
general corporate purposes.
In connection with the pricing of the notes, Rambus entered into
convertible note hedge transactions with one or more of the initial
purchasers or their affiliates and other financial institutions (the
“option counterparties”). The convertible note hedge transactions are
generally expected to reduce potential dilution to the common stock upon
any conversion of notes and/or offset any cash payments Rambus is
required to make in excess of the principal amount of converted notes,
as the case may be. However, the warrant transactions would separately
have a dilutive effect to the extent that the market value per share of
the common stock exceeds the strike price of any warrants. The strike
price of the warrant transactions will initially be approximately $23.30
per share, which represents a premium of 60% over the last reported sale
price of the common stock on November 14, 2017, and is subject to
certain adjustments under the terms of the warrant transactions. If the
initial purchasers exercise their over-allotment option to purchase
additional notes, Rambus may enter into additional convertible note
hedge and additional warrant transactions relating to the additional
notes.
In connection with establishing their initial hedge of the convertible
note hedge and warrant transactions, the option counterparties or their
respective affiliates expect to purchase shares of the common stock
and/or enter into various derivative transactions with respect to the
common stock concurrently with or shortly after the pricing of the
notes. This activity could increase (or reduce the size of any decrease
in) the market price of the common stock or the notes at that time.
In addition, the option counterparties or their respective affiliates
may modify their hedge positions by entering into or unwinding various
derivatives with respect to the common stock and/or purchasing or
selling the common stock or other securities of Rambus in secondary
market transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so during any observation
period related to a conversion of notes or in connection with any
repurchase of notes by Rambus). This activity could also cause or avoid
an increase or a decrease in the market price of the common stock or the
notes, which could affect the ability of noteholders to convert the
notes and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the amount and
value of the consideration that noteholders will receive upon conversion
of such notes. The convertible note hedge transactions and warrant
transactions have not been, and will not be, registered under the Act or
the securities laws of any other jurisdiction and may not be offered or
sold in the United States absent registration or an applicable exemption
from such registration requirements.
In connection with the purchase of the 2018 Notes, Rambus expects that
holders of the 2018 Notes submitting their 2018 Notes for repurchase may
purchase shares of common stock to close out their hedge positions with
respect to the 2018 Notes, which activity may increase the market price
of the common stock.
This announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities and shall not constitute an offer,
solicitation, or sale in any jurisdiction in which such offer,
solicitation, or sale is unlawful. Any offer of the securities will be
made only by means of a private offering memorandum. The notes and the
shares of common stock issuable upon conversion of the notes, if any,
will not be registered under the Act or any state securities laws, and
unless so registered, may not be offered or sold in the United States
except pursuant to an exemption from the registration requirements of
the Act and applicable state laws.
Source: Rambus Inc.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171114006809/en/
Source: Rambus Inc.