Omnicare $750 million 30-year convertibles talked to yield 3.125%-3.625%, up 32.5%-37.5%

By Rebecca Melvin

Princeton, N.J., Dec. 5 - Omnicare Inc. is expected to price $750 million of 30-year convertibles on Dec. 12 after the close of markets, according to a syndicate source.

Price talk on the notes was for a yield of 3.125% to 3.625% with an initial conversion premium of 32.5% to 37.5%. JP Morgan, Lehman Brothers and CIBC World Markets are acting as joint bookrunners, and SunTrust Robinson Humphrey, Wachovia Securities and Merrill Lynch are acting as co-managers for the offering.

The convertibles are non-callable for 10 years and have a put in year 10.

Concurrently with the convertibles offering, the company is offering $750 million of senior subordinated notes and 12,825,000 shares of common stock, not including the underwriters' option to purchase additional shares. The three offerings are conditioned on each other.

A portion of the proceeds from the convertibles will be used to repay the company's $1.9 billion 364-day loan facility. Remaining net proceeds will be used to repurchase all the outstanding $375 million principal amount of its 8.125% senior subordinated notes due 2011.

Covington, Ky.-based Omnicare is a nursing home drug-services provider.

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