Priceline.com starts net share settlement exchange for 1%, 2% convertibles

By Jennifer Chiou

New York, Oct. 10 - Priceline.com Inc. announced the start of an exchange offer for its $100 million of 2.25% convertible senior notes due 2025 and its $125 million of 1% convertible senior notes due 2010.

The new notes will be substantially the same as the old notes, except for a net share settlement feature requiring the company to settle all conversions for cash and, in certain circumstances, cash and shares of Priceline.com stock.

The company is offering to exchange an equal amount of new notes with the same coupon and maturity for the old notes.

The new 1% notes will also have a make-whole premium payable in some circumstances upon conversions as a result of a change in control.

For the 2.25% convertibles, Priceline.com will pay an exchange fee of $2.50 per $1,000 principal amount.

There will be no exchange fee for the 1% convertibles.

The expiration deadline is midnight ET on Nov. 6.

The Norwalk, Conn.-based online travel agency

D.F. King & Co., Inc. is the information agent (call collect 212 269-5550 or 888 886-4425).

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