Interpublic buys stock options to reduce impact of 4.75% convertibles

By Angela McDaniels

Tacoma, Wash., Nov. 29 - Interpublic Group of Cos. entered into some options agreements in connection with its $200 million of 4.75% convertible senior notes due 2023, according to an 8-K filing with the Securities and Exchange Commission.

The options agreements give the company the right in 2013 to purchase up to 16.1 million shares of its common stock at a strike price of $12.42 per share. The number of shares is the same as the number of shares that the notes are convertible into, and the strike price is the same as the notes' conversion price.

The convertibles are first callable on March 15, 2013.

Interpublic said the options are expected to reduce the number of new shares that would otherwise be issued in 2013 upon conversion of the notes if the company's stock price exceeds the conversion price at the time of option exercise.

Subject to some limitations, Interpublic may elect for the options to settle in cash or in shares.

The options will expire on April 2, 2013, and they have a cap price of $18.26 per share.

The strike price, the cap price and the number of shares underlying the options, like the conversion rate under the convertibles, are subject to adjustment under some circumstances.

The company paid $22.8 million for the options.

Interpublic is a New York-based provider of advertising and marketing services.

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