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Western Digital Announces Results of Conversions of SanDisk Convertible Notes

And tender offer

Western Digital  Corporation and its wholly-owned subsidiary SanDisk Corporation announced that holders of approximately $996 million, or 99% of the outstanding principal amount, of their 1.5% convertible senior notes due 2017 and approximately $1,438 million, or 96% of the outstanding principal amount, of their 0.5% convertible senior notes due 2020 and, together with the 2017 notes, converted their notes at the temporarily increased conversion rates that expired on June 9, 2016.

In addition, holders of $100,000 principal amount of the 2017 notes and $2,000 principal amount of the 2020 notes required SanDisk to purchase their notes at par plus accrued and unpaid interest by tendering their notes pursuant to the terms of the tender offer announced by SanDisk on May 12, 2016.
 
The conversion rates for the notes has reverted to
(subject to adjustment per the applicable indenture):

  • with respect to the 2017 notes: 19.7302 units of reference property, corresponding to 4.7096 shares of Western Digital common stock and $1,331.79, per $1,000 principal amount of 2017 notes; and 
  • with respect to the 2020 notes: 10.9006 units of reference property, corresponding to 2.6020 shares of Western Digital common stock and $735.79, per $1,000 principal amount of 2020 notes. The 2020 notes cannot currently be converted because the conditions set forth in the applicable indenture have not been satisfied.  

Each unit of ‘reference property’ is 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. Prior to the expiry of the temporarily increased conversion rate, the conversion rate for the 2017 notes was increased by 1.0702 units of reference property and the conversion rate for the 2020 notes was increased by 2.8720 units of reference property.

Conversions of the notes are governed by the terms of the applicable indenture. All conversions will be net share settled in accordance with the terms of the relevant indenture. Assuming the market price of Western Digital common stock is $48.17 (its closing price as reported on Nasdaq on June 9, 2016) throughout the observation period during which the conversion consideration will be calculated following holders’ elections to convert, Western Digital would issue an aggregate of approximately 2.3 million shares (equal to approximately 0.8% of the outstanding shares of Western Digital common stock as of June 9, 2016, taking such issuance into account) and pay an aggregate of approximately $3.1 billion dollars in cash to holders that converted. The actual number of Western Digital shares issued and cash paid by Western Digital will be determined by its stock price during the 20 trading day observation applicable to each holder that has converted.

In addition, holders that tendered their notes will receive an aggregate of approximately $102,500.

Read also:
Western Digital Closes Offerings of $1.875 Billion Of Senior Secured Notes
And $3.35 billion of senior unsecured notes
2016.04.15 | Press Release
Pricing Of Western Digital $1.875 Billion of Senior Secured Notes and $3.35 Billion of Senior Unsecured Notes
Interest of 7.375% and 10.5% per annum, respectively.
2016.03.31 | Press Release
Western Digital Proposes $1.5 billion of Senior Secured Notes Due 2023
And 4.1 billion of senior unsecured notes due 2024, to finance SanDisk acquisition
2016.03.18 | Press Release

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