Planned Actavis mandatory convertible issue upsized to $4.6 billion

By Rebecca Melvin

New York, Feb. 24 – Actavis plc’s planned mandatory convertible preferred stock issue was upsized to $4.6 billion from $4.2 billion, and the concurrent common stock offering was downsized to $3.8 billion from $4.2 billion, market sources said.

The registered deal, which was expected to price after the market close Tuesday, had had its price talk tightened to a 5.5% to 5.75% dividend with a 20% to 22.5% initial conversion premium on Monday from an initially talked 5.75% to 6.25% dividend with a 17.5% to 22.5% premium.

The deal timing was also accelerated at that time to Tuesday from Thursday.

Proceeds from the two deals, together with additional debt financing, will be used to finance the cash consideration for its $66 billion acquisition of Allergan Inc.

There is a greenshoe for up to $460 million of the mandatories, which are being sold via joint bookrunning managers J.P. Morgan Securities LLC, Mizuho Securities, Wells Fargo Securities LLC, Morgan Stanley & Co. LLC, Barclays and Citigroup Global Markets Inc.

The series A preferred shares have a $1,000 liquidation preference and mature March 1, 2018.

The offerings are not contingent upon each other or on the consummation of the Allergan acquisition. If the acquisition doesn’t close, Actavis will use proceeds for general corporate purposes.

Actavis is a global specialty pharmaceutical company with headquarters in Parsippany, N.J. Allergan is a health care company based in Irvine, Calif. The new company will be called Allergan.

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