Cell Genesys gets tenders for $47.8 million 3.125% convertibles

By Jennifer Chiou

New York, Dec. 17 - Cell Genesys, Inc. said it received tenders from holders of $47.8 million of notes in its modified Dutch auction tender offer for a portion of its $118.7 million outstanding 3.125% convertible senior notes due 2011.

The offer ended at 5 p.m. ET on Dec. 16, extended previously from Dec. 9.

The company said it expects to accept all tendered notes at $400 per $1,000 principal amount, for a total cost of about $19.1 million.

Cell Genesys would have purchased up to $80 million, or 67%, of the convertibles at a price not greater than $400 or less than $340 per $1,000 principal amount. Holders will also receive accrued interest up to but excluding the purchase date.

The company also previously increased the minimum bid offering price to $340 from $320 per $1,000 principal amount.

The tender offer began on Nov. 7 and was not conditioned on any minimum amount being tendered. It will be funded with available cash on hand.

Cell Genesys said it was conducting the tender offer to reduce the principal amount of its outstanding debt and to provide an opportunity to convertible holders to gain liquidity they may not otherwise have. The company believes that reducing its outstanding debt will provide it with increased flexibility to explore strategic alternatives.

The dealer manager was Lazard Capital Markets LLC. The depositary was U.S. Bank NA, and the information agent was Georgeson Inc. (866 206-4938 or call collect at 212 440-9800).

Cell Genesys is a biotechnology company based in South San Francisco, Calif.

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