Valeant Pharmaceuticals to pay cash, issue warrants in exchange for $55.93 million 3% convertibles

By Jennifer Chiou

New York, Aug. 14 - Valeant Pharmaceuticals International entered into an agreement on Thursday under which it will exchange $55.93 million of its 3% convertible subordinated notes due Aug. 16, 2010, according to an 8-K filing with the Securities and Exchange Commission.

In exchange for the notes, the company said it will pay $55.92 million in cash plus accrued interest and issue warrants to purchase 1,769,267 Valeant shares at a per-share purchase price of $31.61195691.

The warrants will be immediately exercisable and will terminate on Aug. 16, 2010.

They will be exercisable on a cashless basis only, meaning that, upon exercise, a portion of the warrant will be canceled in payment of the purchase price payable for the number of warrant shares in the exercise.

The transaction will settle on Monday.

The Aliso Viejo, Calif., specialty pharmaceutical company added that the cash consideration represents 99.99% of the aggregate principal amount of the 3% notes being exchanged.

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