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Arris holders may put back 2% convertibles due to fundamental change
By Jennifer Chiou
New York, May 1 - Arris Group, Inc. announced that holders have the right to require the company to purchase some or all of their 2% convertible senior notes due 2026 following a fundamental change.
On April 12, the company announced that the notes were convertible through May 29. The conversion option was triggered because Arris reorganized its business by creating a new holding company structure.
Under the reorganization, Arris has been renamed Arris Enterprises, Inc. and is a wholly owned subsidiary of the new holding company.
As reported, the primary purpose of the reorganization was to facilitate Arris' acquisition of the Motorola Home business from a subsidiary of Google, which Arris closed on April 17.
According to a prior press release, the business operations of Arris and its subsidiaries were not to change as a result of the reorganization.
In connection with the merger, the company executed a supplemental indenture to provide a guarantee by Arris Group, and the conversion value of the notes will now be calculated with reference to Arris Group stock instead of Arris Enterprises stock.
Holders may put back their notes any time prior to 5 p.m. ET on May 28 to receive par plus accrued interest. The estimated repurchase price will be $1,000.78 per $1,000 aggregate principal amount.
Conversion option
Holders have until 5 p.m. ET on May 29 to convert their securities.
The conversion rate for the notes is 62.1504 shares of Arris Group stock per $1,000 principal amount of notes. There was no change to the conversion rate in connection with the merger.
As of April 29, $232.1 million of notes remains outstanding.
The Bank of New York Mellon Trust Co., NA is the paying and conversion agent (770 698-5184).
Arris is a Suwanee, Ga.-based communications technology company.
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