Pixelworks launches modified Dutch auction tender for up to $50 million of 1.75% convertibles

By Jennifer Chiou

New York, Jan. 29 - Pixelworks Inc. said it began a modified Dutch auction tender offer for up to $50 million, or 35.7%, of its $140 million 1.75% convertible subordinated debentures due 2024.

The Tulatin, Ore., developer of video chips and software said it will purchase the securities for cash at a price of no more than $750 and not less than $680 per $1,000 principal amount, plus accrued interest up to the purchase date.

Pixelworks said it will pay a maximum purchase price of $37.5 million, plus accrued interest.

The tender offer ends at 5 p.m. ET on Feb. 28.

The offer allows holders of convertible debentures to indicate the amount of convertible debentures they wish to tender and the price within the specified price range at which they would like to tender the securities.

Pixelworks said it is conducting the tender offer in order to reduce the principal amount of its outstanding indebtedness and noted that it believes that the tender offer provides an opportunity to holders of the debentures to gain liquidity they may not otherwise have.

The company intends to fund the offer with available cash on hand.

The tender offer is not conditioned upon any minimum principal amount of convertible debentures being tendered.

The company said that it will accept notes tendered beyond the maximum amount on a pro rata basis.

The dealer manager for the offer is Thomas Weisel Partners LLC. The information agent is Laurel Hill Advisory Group (800 555-3858 or call collect 516 933-3100), and the depositary is Mellon Investor Services LLC.

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