Salix convertible noteholders get change-of-control put option

By Angela McDaniels

Tacoma, Wash., April 1 – Salix Pharmaceuticals, Ltd. announced a change-of-control put option for its 2.75% convertible senior notes due May 15, 2015 and 1.5% convertible senior notes due March 15, 2019.

Valeant Pharmaceuticals International, Inc. acquired Salix on April 1, and Salix’s common stock was delisted from the Nasdaq Global Select Market.

Holders can require the company to buy back their notes at par plus accrued on April 30, according to company news releases.

Holders have until 5 p.m. ET on April 29 to exercise the put option.

In addition, the notes are now convertible into cash instead of Salix stock.

The conversion rate for the 2.75% convertibles is 21.5592 shares of common stock per C$1,000 principal amount of notes. The conversion rate was not increased in connection with the merger.

The conversion rate for the 1.5% convertibles is 15.1947 shares of common stock per C$1,000 principal amount of notes.

Noteholders who elect to convert their 1.5% notes from April 1 until 5 p.m. ET on April 29 will receive an additional 0.2053 shares of common stock under the make-whole conversion rate adjustment provision, resulting in an adjusted conversion rate of 15.4 shares for each C$1,000 principal amount of the notes.

Valeant is a pharmaceutical company based in Laval, Quebec.

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