Medtronic units increase cap to $3 billion in maximum offer

By Wendy Van Sickle

Columbus, Ohio, March 4 – Medtronic plc announced the upsizing of the maximum cash tender offer by its wholly owned subsidiaries Medtronic, Inc. and Covidien International Finance SA for nine series of notes to $3 billion from $1.9 billion, according to a news release on Monday.

The total purchase price excludes accrued interest.

Additionally, the series tender cap for Covidien’s 6.55% senior notes due 2037 was increased to $90 million from $75 million.

The offer opened on Feb. 20, along with an any-and-all offer for two series.

Other terms were not changed, including those of the any-and-all tender offer.

The any-and-all offer covers the following notes, with pricing per $1,000 principal amount:

• Medtronic’s $2.5 billion 2.5% senior notes due 2020, with a purchase price that will be set using the 1.625% U.S. Treasury note due March 15, 2020 plus 15 basis points; and

• Covidien’s $600 million 4.2% senior notes due 2020, with a purchase price that will be set using the 1.5% U.S. Treasury note due June 15, 2020 plus 15 bps.

The maximum offer covers the following notes, listed in order of acceptance priority, with pricing per $1,000 principal amount:

• Up to $75 million of Covidien’s $374,039,000 6.55% senior notes due 2037, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 100 bps;

• Medtronic’s $300 million of 6.5% senior notes due 2039, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 105 bps;

• Medtronic’s $500 million of 5.55% senior notes due 2040, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 90 bps;

• Medtronic’s $650 million of 4.625% senior notes due 2044, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 80 bps;

• Medtronic’s $400 million of 4.5% senior notes due 2042, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 85 bps;

• Medtronic’s $4.15 billion of 4.625% senior notes due 2045, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 80 bps;

• Medtronic’s $2,381,619,000 of 4.375% senior notes due 2035, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 70 bps;

• Medtronic’s $500 million of 4.125% senior notes due 2021, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 15 bps; and

• Medtronic’s $325,024,000 of 4% senior notes due 2043, with a purchase price that will be set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 90 bps.

For each series, the total purchase price will include an early tender payment of $30 per $1,000 principal amount that will be paid only to holders who tender by the early deadline, 5 p.m. ET on March 5.

Pricing will be set at 11 a.m. ET on March 6.

Holders will also receive accrued interest to but excluding the relevant settlement date.

The offers will expire at 11:59 p.m. ET on March 19.

Early settlement is expected to occur on March 11 and final settlement on March 21.

The offers are subject to a financing condition.

The remaining 2.5% notes due 2020 and the 4.2% notes due 2020 may be called for redemption on March 7.

Barclays Capital Inc. (212 528-7581 or 800 438-3242) and BofA Merrill Lynch (980 387-3907 or 888 292-0070) are the dealer managers.

Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) is the information and tender agent.

Medtronic is a medical technology company based in Minneapolis.

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