SUNNYVALE, Calif.--(BUSINESS WIRE)--
Rambus Inc. (NASDAQ: RMBS) today announced its intention to offer,
subject to market conditions and other factors, $150 million aggregate
principal amount of its convertible senior notes due 2023 in a private
placement to qualified institutional buyers pursuant to Rule 144A under
the Securities Act of 1933, as amended (the “Act”). Rambus also expects
to grant the initial purchasers of the notes a 13-day option to purchase
up to an additional $22.5 million aggregate principal amount of the
notes to cover over-allotments, if any.
The notes will be unsecured, unsubordinated obligations of Rambus, and
interest will be payable semi-annually. 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. Final terms of the notes, including the interest rate,
initial conversion rate and other terms, will be determined by
negotiations between Rambus and the initial purchasers of the notes.
Rambus expects 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 the repurchase of up to $60
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 for general
corporate purposes.
In connection with the pricing of the notes, Rambus plans to enter into
convertible note hedge transactions with one or more of the initial
purchasers or their affiliates or 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
common stock exceeds the strike price of any warrants. 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 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.
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/20171113006287/en/
Source: Rambus Inc.