Morning Commentary: New Violin quiet on debut; Concur ‘comes in’ on hedge on buyout news

By Rebecca Melvin

New York, Sept. 19 – Violin Memory Inc.’s newly priced 4.25% convertibles were not heard in trade early Friday on their debut in secondary market action after the Santa Clara, Calif.-based computer data storage company priced an upsized $105 million of the five-year senior notes at the midpoint of talk.

But Violin Memory shares rose sharply, adding about 6% to $4.70 after a drop on Thursday following the launch of the convertibles deal.

“They may trade later,” a syndicate source said of the Violin Memory convertibles.

Back in established issues, Concur Technologies Inc.’s 0.5% convertibles jumped on an outright basis by about 11 points as shares surged 18% to $127.38. But the convertibles contracted on a dollar-neutral, or hedged, basis, giving up about 0.5 point, depending on the delta hedge before the takeout news, a New York-based trader said.

The Concur securities were lifted outright by news that the Redmond, Wash.-based expense management software company will be bought by German software giant SAP for $129 per share in cash, which represented a 20% premium to Concur’s share price late Thursday.

The Concur convertibles were trading at about 130.375 bid, 130.875 offered. That was up 11 points from trades with a 119 handle on Thursday.

The convertibles will trade according to the takeover protections outlined in their indenture. Concur priced an upsized $425 million of the 0.5% convertibles in May 2013. The non-callable notes, which have standard takeover protection, mature on June 15, 2018.

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