Innoviva, Inc. Prices Upsized Offering of $225 Million of 2.125% Convertible Senior Notes
- Proceeds expected to be used to repurchase a portion of the 2023 Notes, fund capped call transactions, and for general corporate purposes
The Notes will mature on
The Notes will be convertible, based on the applicable conversion rate, into cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The initial conversion rate for the Notes is 38.1432 shares of the Company’s common stock per
The Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after
If a “fundamental change” (as defined in the indenture for the Notes) occurs, then, subject to limited exceptions, noteholders may require the Company to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, but excluding, the applicable repurchase date.
The Company estimates that the net proceeds from this offering will be approximately
Contemporaneously with the pricing of the Notes, the Company entered into separate and individually negotiated transactions (the “concurrent repurchases”) with certain holders of the 2023 Notes to repurchase
The Company expects that certain holders of any 2023 Notes that the Company agreed to repurchase that have hedged their equity price risk with respect to such 2023 Notes (the “hedged holders”) will, concurrently with or shortly after the pricing of the Notes offered hereby, unwind all or a part of their hedge positions by buying the Company’s common stock and/or entering into or unwinding various derivative transactions with respect to the Company’s common stock. The amount of the Company’s common stock to be purchased by the hedged holders may be substantial in relation to the historic average daily trading volume of the Company’s common stock. Any repurchase of the 2023 Notes and the potential related market activities by holders of the 2023 Notes participating in the concurrent repurchases could increase (or reduce the size of any decrease in) the market price of the Company’s common stock and may have increased the initial conversion price of the Notes. The Company cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Notes or the Company’s common stock.
In addition, in connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “option counterparties”). The cap price of the capped call transactions will initially be
The Company has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of the Company's common stock and/or enter into various derivative transactions with respect to the common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of the common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling the common stock or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so on each exercise date of the capped call transactions and in connection with any early termination event in respect of the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the common stock or the Notes, which could affect a noteholder's ability to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes, it could affect the number of shares and value of the consideration that a noteholder will receive upon conversion of the Notes.
In addition, if any such capped call transaction fails to become effective, whether or not this offering of the Notes is completed, the option counterparty party thereto may unwind its hedge positions with respect to the common stock, which could adversely affect the value of the common stock and, if the Notes have been issued, the value of the Notes.
The Notes have been offered to qualified institutional buyers pursuant to Rule 144A under the Act. Neither the Notes nor the shares of the Company’s common stock issuable upon conversion of the Notes, if any, have been or will be registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities (including the 2023 Notes), and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful. The Notes and the shares of the Company’s common stock issuable upon conversion of the Notes, if any, will not be registered under the Act or any state securities laws, and unless so registered, may not be offered or sold in
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Cautionary Note on Forward-Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include any statements regarding Innoviva’s completion of the offering, Innoviva’s anticipated use of proceeds, Innoviva’s ability to repurchase the 2023 Notes and any other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions. Such forward-looking statements involve substantial risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements. Forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the Company’s business in general, see the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed with the