Ashland calls Hercules' 8% convertibles after acquisition completion

By Jennifer Chiou

New York, Nov. 14 - Ashland Inc. said it delivered a notice of redemption to holders of Hercules Inc.'s $2.17 million of 8% convertible subordinated debentures due Aug. 15, 2010.

On Nov. 5, Hercules' shareholders approved the company's acquisition by Ashland at a special meeting. The acquisition was effective as of Thursday.

The debentures will be redeemed at par plus accrued interest to Dec. 3, the redemption date.

Under the provisions of the indenture, holders of the debentures could have elected to convert their debentures into Hercules shares. The conversion price would have been $14.90 per share.

Debentures outstanding at the effective time of the merger became convertible into the right to receive the merger consideration, which was based on the number of common shares into which a debenture might have been converted immediately prior to the merger.

Under the merger agreement, the merger consideration for each share of Hercules common stock outstanding is $18.60 in cash, without interest, and 0.0930 of a share of common stock of Ashland.

If a holder elects to exercise a conversion right, for each $1,000 of principal amount converted, the holder will be entitled to receive $1,248.32 in cash, without interest, and 6.2416 shares of Ashland common stock.

The right to convert the debentures will terminate on Nov. 28.

In July, Ashland agreed to acquire Hercules in a stock-and-cash deal valued at $23.01 per Hercules share, or about $3.3 billion including debt.

For redemptions, the debentures may be delivered to the trustee, the Bank of New York Mellon, Global Corporate Trust (first-class mail to P.O. Box 2320, Dallas, TX 75221-2320; by registered/certified express delivery to 2001 Bryan St., Ninth Floor, Corporate Trust Window, Dallas, TX 75201; or by hand delivery to 101 Barclay St., First Floor East, New York, NY 10286).

For conversions, the debentures may be surrendered to the Bank of New York Mellon (101 Barclay St., First Floor East, New York, NY 10286; contact Francine Kincaid with question at 212 815- 5082).

Ashland is a diversified chemical company based in Covington, Ky.

Hercules manufactures and markets specialty chemicals for making products for home, office and industrial markets. The company is based in Wilmington, Del.

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