Mylan moves up in line on Teva bid; Lam Research jumps outright; Iconix continues to trade

By Rebecca Melvin

New York, April 21 – The convertibles of Mylan NV and Teva Pharmaceutical Industries Ltd. added on an outright basis but were in line on a dollar-neutral basis on Tuesday after news that Teva has offered to buy its smaller rival for $82.00 per share, which represents a 23% premium to the company’s previous share price, or about $40 billion in cash and stock.

Both bonds “are parity or less-parity names,” so the deal wasn’t overly significant from a hedged perspective, a New York-based trader said.

Elsewhere, traders were watching upcoming earnings news for reports that could send shares up or down.

After the market close, Yahoo! Inc. reported an earnings miss that sent its stock a little lower in after-hours trade.

Back in the regular session, Lam Research Corp.’s convertible issues were trading actively after the Fremont, Calif.-based semiconductor-equipment company reported better-than-expected earnings and a strong outlook after the market close on Monday.

Iconix Brand Group Inc.’s convertible bonds saw follow-on trading action on Tuesday with a bounce in the underlying shares and higher bond prices after word on Monday that the company’s chief operating officer was leaving the position after only one year.

Shares of the New York-based brand management company bounced back almost 5% after plunging 20% on Monday.

“We traded some ICON round $103,” a New York-based trader said of the 2.5% convertibles due 2016. Later these bonds were seen at 105, according to Trace data.

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