Medtronic sets pricing in tender offer, lifts tender cap to $3 billion

By Angela McDaniels

Tacoma, Wash., April 14 – Medtronic plc released the early results of its tender offer, determined the prices it will pay in the offer and increased the cap for the offer, according to company news releases.

Investors had tendered $5.82 billion of notes as of 5 p.m. ET on April 13, the early tender date.

Medtronic increased the maximum combined aggregate purchase price, excluding interest, to $3 billion from $2.75 billion and amended the tender caps for some series of notes.

The company said that because the offer is oversubscribed, the notes tendered by the early tender date will be purchased on a prorated basis according to acceptance priority levels and it does not expect to accept for purchase any notes tendered after the early deadline.

Holders had tendered the following notes, which are listed in order of acceptance priority, as of the early tender date:

• $475,961,000 of the $850 million 6.55% senior notes due 2037 issued by wholly owned subsidiary Covidien International Finance SA, all of which were accepted. The tender cap is unchanged at $600 million;

• $440,484,000 of the $750 million 2.95% senior notes due 2023 issued by Covidien, all of which were accepted. The tender cap was increased to $440,484,000 from $250 million;

• $424,976,000 of the $750 million 4% senior notes due 2043 issued by wholly owned subsidiary Medtronic, Inc., all of which were accepted. The tender cap was increased to $424,976,000 from $250 million;

• $719,779,000 of the $1.25 billion 2.75% senior notes due 2023 issued by Medtronic, Inc., all of which were accepted. The tender cap was increased to $719,779,000 from $400 million;

• $484,409,000 of the $1.25 billion 4.45% senior notes due 2020 issued by Medtronic, Inc., all of which were accepted. The tender cap was increased to $484,409,000 from $400 million;

• $1,857,239,000 of the $2.5 billion 4.375% senior notes due 2035 issued by Medtronic, Inc., $118,381,000 of which were accepted. The tender cap was revised to not applicable from $450 million; and

• $1,415,679,000 of the $2.5 billion 2.5% senior notes due 2020 issued by Medtronic, Inc., none of which were accepted. The tender cap was unchanged at $150 million.

Pricing, other details

Pricing was set at 11 a.m. ET on April 14 using a fixed spread over the yield to maturity of a U.S. Treasury security.

For each $1,000 principal amount of notes, the total consideration is as follows:

• $1,384.77 for the 6.55% notes, set using the 2.592% reference yield of the 3% Treasury due Nov. 15, 2045 and 130 basis points;

• $1,048.86 for the 2.95% notes, set using the 1.785% reference yield of the 1.625% Treasury due Feb. 15, 2026 and 40 bps;

• $1,069.29 for the 4% notes, set using the 2.592% reference yield of the 3% Treasury due Nov. 15, 2045 and 100 bps;

• $1,044.65 for the 2.75% notes, set using the 1.785% reference yield of the 1.625% Treasury due Feb. 15, 2026 and 25 bps;

• $1,114.34 for the 4.45% notes, set using the 1.237% reference yield of the 1.25% Treasury due March 31, 2021 and 20 bps;

• $1,121.47 for the 4.375% notes, set using the 2.592% reference yield of the 3% Treasury due Nov. 15, 2045 and 90 bps; and

• $1,038.40 for the 2.5% notes, set using the 1.237% reference yield of the 1.25% Treasury due March 31, 2021 and 25 bps.

In each case the total consideration includes an early tender premium of $30 per $1,000 principal amount of notes tendered by the early tender deadline.

The company will also pay accrued interest to the settlement date, which is expected to be April 15.

The tender offer began March 31 and was scheduled to end at 11:59 p.m. ET on April 27.

BofA Merrill Lynch (980 387-3907 or 888 292-0070), Citigroup Global Markets, Inc. (212 723-6106 or 800 558-3745) and J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666) are the lead dealer managers for the tender offer, and HSBC Securities (USA) Inc., Mizuho Securities USA Inc. and Wells Fargo Securities, LLC are co-dealer managers. The information agent and tender agent is Global Bondholder Services Corp. (866 470-4200 or 212 430-3774 for banks and brokers).

Medtronic is a medical technology company based in Minneapolis.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.