Priceline active; FXCM better despite lower shares; Array BioPharma surges on drug deal

By Rebecca Melvin

New York, Jan. 23 – Priceline Group Inc.’s convertibles were moving in line with their underlying shares in active trade on Friday, market sources said.

The Priceline 0.9% paper traded at about 93.5, which was down from 94, with shares down about $10.00, or 1%, at $1,039.77, a New York-based sellsider said.

There was chatter about consolidation in the online travel agency space and news that Expedia has bought Travelocity for $280 million in cash from Sabre Corp.

Priceline accounted for a big chunk of total volume traded in convertibles, according to Trace data, a New York-based trader said.

FXCM Inc. continued to trade actively, which has been the case all week, and those bonds were seen at about 64 at the end of the session despite a 24% drop in the company’s shares to $2.37.

Energy XXI Ltd.’s 3% convertibles due 2018 traded down to about 24.5 from 27.5 despite a gain in its shares, however. The stock ended up 4 cents, or 1.6%, to $2.57 in light volume.

Oil prices were mixed, with U.S. West Texas Intermediate crude oil extending a slide that has characterized the week. But Brent crude oil rose. News Friday that Saudi king Abdullah bin Abdul Aziz has died rattled the market briefly, but his death wasn’t expected to change Saudi Arabia’s current stance of pumping oil at high levels despite the over supplied and demand dampened market.

West Texas intermediate crude for March delivery ended at $45.44, down another 87 cents, or 1.9%, on the day.

To the upside on Friday was Array BioPharma Inc. The Boulder, Colo.-based-biopharmaceutical company announced that it has inked an agreement to acquire a late-stage cancer drug from Swiss pharmaceutical giant Novartis that is in late-stage clinical trials for use as a skin cancer treatment.

“Acquiring worldwide rights to encorafenib, an innovative late-stage oncology product, represents a tremendous opportunity for Array,” chief executive officer Ron Squarer said in a release.

Array’s convertibles traded last at 119 and were up from about 95 previously. But the bonds were indicated higher at 120.6 by one market source. Shares surged $2.06, or 41%, to $7.11.

Otherwise the session, which saw no new issuance, was lackluster in terms of secondary market action, sources said.

“Things are trading all over the place,” a New York-based trader said. “The market is tough to figure out, with high vol. and rates coming in, valuations should have gotten somewhat better, but they just haven’t.”

A second trader said that the market was slow, given that the broader “markets are not moving that much, and there is not a lot on the calendar.”

Equities were mixed to lower, and bond yields were down.

Priceline in line

Priceline’s 0.9% convertible traded at 93.5 and also at 93.9, with the underlying shares at $1,039.77 in the early session.

“That was pretty much in line,” a New York-based sellsider said.

Meanwhile, Priceline’s 0.35% convertibles due 2020 traded last at 108.7, and Priceline’s 1% convertibles due 2018 were last at 126.25, which was down from about 127.5.

Expedia and Travelocity’s link up consolidates two of the biggest travel sites into one. Others in the field include Orbitz, Kayak and Hipmunk.

FXCM edges up

FXCM’s 2.5% convertibles due 2018 traded last at about 64, sources said. That was up from about 62 previously.

FXCM shares fell 73 cents, or 24%, to $2.37.

“People are thinking that at the end of the day, the equity will be worth nothing and the bonds will be money good,” a trader said.

The FXCM convertibles climbed into the mid-60s on Thursday after trading at 41 to 43 on Tuesday. They had traded as low as 30 last Friday. Previously, the bonds were at 95.

FXCM shares plunged to a little more than $1.00 on Tuesday from $12.63 last Thursday before the Swiss National Bank’s move to unpeg its currency from a cap.

The FXCM bonds had recovered some ground from their initial collapse but slipped back Tuesday upon release of terms of the Leucadia National Corp. financing agreement that constituted a bailout for the company.

Mentioned in this article:

Array BioPharma Inc. Nasdaq: ARRY

Energy XXI Ltd. Nasdaq: EXXI

FXCM Inc. Nasdaq: FXCM

Priceline Group Inc. Nasdaq: PCLN

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