Morning Commentary: New, upsized Knowles adds on swap; TiVo bonds gain on Rovi takeover

By Rebecca Melvin

New York, April 29 – Knowles Corp.’s newly priced 3.25% convertibles traded up a little more than a point on an outright basis and was higher on swap early Friday after the Itasca, Ill.-based advanced micro-acoustic products company priced an upsized $150 million of the 5.5-year senior notes at the rich end and beyond the rich end of talk.

The new Knowles convertibles were last seen at 101.25 with the underlying shares down 24 cents, or 1.8%, at $13.15, a New York-based trader said.

The bonds priced with a 37.5% initial conversion premium, which compared to talk for a 27.5% to 32.5% premium. Coupon talk was for a 3.25% to 3.75% coupon. The deal size was increased to $150 million from $125 million.

TiVo Inc.’s 2% convertibles due 2021 traded up a few points to about 98.25 after news that the Alviso, Calif.-based provider of technology and services for digital video recorders is being purchased by Rovi Corp., the Santa Clara, Calif.-based software and internet media company.

Rovi said it will pay $10.70 per TiVo share in cash and stock, or $1.1 billion, representing a 13.6% premium over TiVo’s closing share price on Thursday.

TiVo shares were up 5% to $9.90 on Friday.

The Rovi 0.5% convertibles due 2020 were not heard in trade, a market source said.

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