Expedia assumes HomeAway’s $402.5 million 0.125% convertibles due 2019

By Marisa Wong

Morgantown, W.Va., Dec. 15 – Expedia, Inc. assumed HomeAway, Inc.’s obligations under its 0.125% convertible senior notes due 2019 in connection with Expedia’s acquisition of HomeAway, according to an 8-K filing with the Securities and Exchange Commission.

Expedia, HomeAway and trustee U.S. Bank NA entered into a supplemental indenture to the notes on Tuesday.

Expedia also assumed HomeAway’s obligations under its outstanding convertible note hedge transactions, which cover shares of HomeAway common stock at a strike price corresponding to the initial conversion price of the notes and are exercisable upon conversion of the notes.

As a result of the merger, the convertible notes are now convertible at $10.15 per share in cash and 0.2065 of a share of Expedia common stock, plus cash in lieu of any fractional shares, which is the consideration paid under the exchange offer for all of the issued and outstanding shares of HomeAway common stock. A wholly owned subsidiary of Expedia launched the exchange offer on Nov. 16.

If holders choose to convert the convertible notes, Expedia has the right to settle all or a portion of the notes in cash.

Completion of the acquisition also constituted a fundamental change and a make-whole fundamental change under the terms of the notes, the filing added.

HomeAway issued $402.5 million of the convertibles in March 2014.

Expedia is a Bellevue, Wash.-based online travel company. Austin, Texas-based HomeAway is a vacation rental site.

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