OSI sets expiration on purchase offer for 2% convertibles at July 30; holders convert all 3% notes

By Susanna Moon

Chicago, July 13 - OSI Pharmaceuticals Inc. said it amended the offer to purchase its 3% convertible senior subordinated notes due 2038 and that holders converted all of the company's 2% convertible senior subordinated notes due 2025.

As a result, the company terminated the offer to purchase the 2% convertibles, which was required under the note indenture. The notes were convertible through July 19.

As for the 3% notes, OSI said it set the expiration date for the purchase right at July 30, regardless of whether it arises because of the change of control, the merger or the delisting.

The company said it will pay, in cash, par plus accrued interest to Aug. 2 for each $1,000 principal amount of 3% notes tendered by July 30. The payment date is Aug. 2.

The company announced the purchase offer on June 17.

Holders may put the 3% convertibles as a result of a fundamental change.

OSI said three fundamental changes occurred on the following dates:

• On June 3 as a result of the acquisition by Astellas Pharma Inc. of beneficial ownership of more than 50% of the company's common stock;

• On June 8 after the merger with an indirect subsidiary of Astellas Pharma Inc.; and

• On June 18 with the delisting of the company's common stock from the Nasdaq Global Select Market.

2% notes convertible

OSI said on June 18 that its 2% notes would remain convertible through July 19 because of the company's delisting from the Nasdaq, which constituted a fundamental change under the indenture.

Holders may convert the notes for 30 days after the announcement of the fundamental change.

The company said it would satisfy the conversion obligation in cash.

The notes were convertible at a rate of 33.9847 common shares per $1,000 note.

OSI Pharmaceuticals' stock (Nasdaq: OSIP) closed at $57.49 on June 17.

OSI said on June 9 that the notes were convertible through at least July 8 because of the merger with the Astellas subsidiary, which constituted another fundamental change.

The notes were convertible at a rate of 34.0420 common shares per $1,000 principal amount of notes, which was equivalent to a conversion price of $29.38. OSI's stock closed at $57.49 on June 8.

The notes also became convertible on June 3 when Astellas became the beneficial owner of 50% or more of the company's voting stock under a tender offer.

The notes were convertible at a rate of 33.9847 common shares per $1,000 principal amount, or an effective conversion price of $29.43 per share.

The notes also became convertible on April 1 because the company's common stock closed at or above $35.32 per share for 20 trading days within the 30-trading-day period ended March 31.

Based in Melville, N.Y., OSI Pharmaceuticals develops and commercializes targeted medicines designed to extend life and improve the quality of life for patients with cancer, diabetes or obesity.

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