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Omnicom offers incentive to amend, not put zero-coupon convertibles
New York, June 10 - Omnicom Group Inc. announced it will pay $40 per $1,000 to holders of its zero-coupon zero-yield convertible notes due 2038 who agree to amendments and do not exercise the upcoming put option.
Omnicom is seeking the consent of holders to waive any contingent interest payable from dec. 5, 2010 through Dec. 15, 2013 and to eliminate the company's right to redeem the notes before June 17, 2013.
The payment will be made as soon as possible after June 18 to holders who have not exercised the put option on June 15 and who deliver consents by June 18.
The solicitation expires on July 9 and holders who deliver consents after June 18 but before the close of business on July 9.
Omnicom previously on June 7 said it was amending the provisions of its zero-coupon zero-yield convertible notes due 2033 and zero-coupon zero-yield convertible notes due 2038 to limit when it can exercise its redemption option, according to a company news release.
Before the amendment, Omnicom had the right to redeem the convertibles at any time from June 15 onward.
Now it can redeem the convertibles only on the following dates between 2010 and 2018: June 15, June 17, 2013 and June 15, 2018. Beginning June 15, 2018, Omnicom will be able to redeem the convertibles at any time.
Omnicom must notify holders at least 30 days prior to any redemption.
The company said the effect of the amendment in 2010 through 2018 will be to permit noteholders to know with certainty whether Omnicom intends to redeem the convertibles before deciding whether to exercise their put options.
Omnicom is a marketing and corporate communications company based in New York.
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