Royal Host begins automatic repurchase plan for three convertibles

By Angela McDaniels

Tacoma, Wash., Oct. 17 - Royal Host Inc. began an automatic securities repurchase plan on Oct. 17 for its 6% convertible subordinated debentures due 2015, 6.25% convertible subordinated debentures due 2013 and 5.9% convertible subordinated debentures 2014, according to a company news release.

The company began normal course issuer bids for the three series of convertibles on Sept. 12. The issuer bids and the automatic securities repurchase plan will all terminate on Sept. 11, 2012.

Royal Host said the plan was established to provide standard instructions regarding how its convertibles are to be repurchased under each issuer bid. The company may make repurchases on any trading day during the issuer bids including during self-imposed trading blackout periods.

No 6% convertibles or 5.9% convertibles will be repurchased under the automatic repurchase plan until the company's substantial issuer bid for those convertibles expires.

Substantial issuer bid

Under the substantial issuer bid, the company is offering to purchase for cancellation up to C$15 million principal amount of its series B 6% convertibles and up to C$10 million principal amount of its series D 5.9% convertibles.

The offers will remain open until at least Nov. 25.

Royal Host is offering C$720 per C$1,000 principal amount of series B 6% convertibles and C$770 per C$1,000 principal amount of series D 5.9% convertibles.

Holders will also receive accrued interest.

Normal course issuer bids

As previously reported, Royal Host plans to purchase for cancellation up to 10% of the public float issued and outstanding of its convertibles under the normal course issuer bids. As of Sept. 8, that includes

• Up to C$4,142,000 principal amount of its C$41,425,600 of 6% convertibles;

• Up to C$4,892,000 principal amount of its C$48.92 million of 6.25% convertibles; and

• Up to C$5,199,000 principal amount of its C$51,997,000 of 5.9% convertibles.

The company will pay market prices.

Royal Host owns and operates hotels. It is based in Halifax, N.S.

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