Omnicom gets consents for $398.22 million convertibles so far; holders put back $197.04 million

By Angela McDaniels

Tacoma, Wash., June 22 - Omnicom Group Inc. has received consents from the holders of $398,215,000 of its zero-coupon zero-yield convertible notes due 2038, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into a supplemental indenture on June 21, and the amendments it contains are binding on the holders who have consented so far.

The consent solicitation began June 10 and will end July 9. Holders of $8,407,000 principal amount of convertibles have not yet consented to the amendments.

The company is seeking the consent of holders to waive any contingent interest payable from Dec. 5 through Dec. 15, 2013 and to eliminate the company's right to redeem the notes before June 17, 2013.

Holders who agree to the amendments and who did not exercise the recent put option will receive $50 per $1,000. This payment was originally $40 and was later increased.

The company previously said the payment would be made as soon as possible after June 18 to holders who had not exercised the put option on June 15 and who delivered consents by June 18.

Holders who did not exercise the put option and who deliver consents after June 18 but before the expiration of the consent solicitation will receive payment as soon as possible after July 9.

Put option

Holders put back $197.04 million principal amount of the convertibles for purchase at par, according to the 8-K filing.

On June 21, the company purchased and retired $60.79 million principal amount of the put convertibles, and an unaffiliated purchase party purchased the remaining $136.25 million.

The convertibles purchased by Omnicom will be canceled, and the convertibles purchased by the purchase party will remain outstanding.

As previously reported, Omnicom said on June 7 that it was amending the provisions of the convertibles and its zero-coupon zero-yield convertible notes due 2033 to limit when it can exercise its redemption option.

Before the amendment, Omnicom had the right to redeem the convertibles at any time from June 15 onward.

Following the amendment, the convertibles were callable on June 15, they are callable again on June 17, 2013, and they will be callable at any time beginning June 15, 2018.

Omnicom must notify holders at least 30 days prior to any redemption.

The company said the effect of the amendment in 2010 through 2018 is 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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