Vitamin Shoppe plans to sell $125 million five-year convertibles

By Rebecca Melvin

New York, Dec. 2 – The Vitamin Shoppe launched an offering of $125 million of five-year convertible senior notes in a Rule 144A deal after the market close on Wednesday, according to a release.

Price talk was not available, a syndicate source said, by Prospect News’ deadline.

Joint bookrunners of the deal are BofA Merrill Lynch and J.P. Morgan Securities LLC.

There is a greenshoe for up to an additional $18.75 million of notes for the five-year non-callable notes. The notes will be net share settled.

In connection with the pricing of the notes, Vitamin Shoppe plans to enter into convertible note hedge and warrant transactions, or a call spread, with initial purchasers of the bonds.

Proceeds will be used to repurchase up to $50 million of common shares from purchasers of the convertible notes in privately negotiated transaction with remaining proceeds earmarked for additional share repurchase.

Also in connection with the offering, another $100 million share repurchase program has been authorized in addition to the company’s existing $200 million share repurchase program.

Secaucus, N.J.-based Vitamin Shoppe is a specialty retailer and contract manufacturer of nutritional products.

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