Omnicare plans to price $500 million 15-year convertibles to yield 3.5%-4%, up 20%-25%

By Rebecca Melvin

New York, Nov. 30 - Omnicare Inc. plans to price $500 million of 15-year convertible senior subordinated notes after the market close Wednesday that were talked to yield 3.5% to 4% with an initial conversion premium of 20% to 25%, according to a market source.

The registered, off-the-shelf offering has an option for up to an additional $75 million of convertible notes to cover over-allotments.

The notes will be non-callable for eight years and then provisionally callable subject to a 120% price hurdle over the conversion price. There are no puts.

Net proceeds will be used to repurchase up to $525 million of Omnicare's 3.25% convertible debentures due 2035 under a tender offer launched Nov. 17. The tender is contingent on the convertibles offering, but the convertibles offering is not contingent on the tender.

All or a portion of any excess proceeds will be used to repurchase or repay outstanding debt, with any remaining for general corporate purposes.

Barclays Capital Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC are acting as joint bookrunners for the convertibles.

Omnicare is a Covington, Ky.-based pharmaceutical services company.

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