International Power holders may convert, redeem bonds due to merger

By Susanna Moon

Chicago, April 16 - International Power plc holders may be able to convert their notes in connection with a cash offer for the company by Electrabel SA, a wholly owned subsidiary of GDF Suez SA.

Electrabel has agreed to acquire the company for 418p per share, which reflects a 20.8% premium to the company's closing price of 345.9p (London: IPR) on Feb. 29, the last business day "before press and market speculation intensified that GDF Suez would make an offer," according to a press release by GDF Suez.

The offer values the share capital of International Power at about £22.8 billion, assuming full conversion of its convertible bonds and exercise of share options, the release said.

International Power plans to treat the effective date of the acquisition as a relevant event under the note terms, allowing holders to

• Convert their bonds at the prevailing conversion price prior to the effective date of the merger, and they will receive the offer price for each share then held;

• Convert their bonds during the 60 days following the merger at the relevant event-enhanced conversion price. Holders who exercise this right will receive the offer payment of 418p for each International Power share they would otherwise have been entitled to on conversion, rather than the resulting International Power shares, shortly following the end of the 60-day relevant event period;

• Convert their bonds at the prevailing conversion price following the end of the 60-day relevant event period. Holders who exercise this right will not be entitled to the enhanced conversion price and will receive the offer price for each company share they would otherwise have been entitled to on conversion rather than the resulting International Power shares; or

• Redeem their convertibles at par plus accrued interest.

The company's shares closed at 416.8p on April 16.

International Power a London-based independent power generation company.

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