SanDisk Corporation (NASDAQ: SNDK), a global leader in flash storage
solutions, announced today its intention to offer, subject to market and
other conditions, up to $1.0 billion principal amount of Convertible
Senior Notes due in 2020 in a private offering to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933. In addition, the Company expects to grant the initial purchaser
for the offering an option to purchase up to an additional $150 million
principal amount of notes from the Company to cover over-allotments.
The Company intends to use a portion of the net proceeds of the offering
to fund the cost of privately negotiated convertible note hedge
transactions, which will serve to increase the effective conversion
price of the convertible debt. In addition, the Company intends to use a
portion of the net proceeds to repurchase shares of its common stock
from purchasers of the notes in privately negotiated transactions, which
will be consummated concurrently with the offering. The remaining net
proceeds are expected to be used for: (1) the repayment at maturity, or
repurchase from time to time, of a portion or all of the Company’s
currently outstanding indebtedness; (2) potential strategic investments
or acquisitions; (3) the repurchase, from time to time, of shares of the
Company’s common stock pursuant to the Company’s existing stock
repurchase programs; and (4) other general corporate purposes, including
capital expenditures related to manufacturing and technology.
Privately Negotiated Convertible Note Hedge Transactions
The Company currently intends to use a portion of the net proceeds of
the offering to fund the cost of privately negotiated convertible note
hedge transactions (after taking into account the proceeds to it from
warrant transactions) that the Company intends to enter into with the
initial purchaser for the offering or other financial institutions (the
“dealers”). The Company also intends to enter into separate privately
negotiated warrant transactions with such dealers or their affiliates,
and anticipates that the warrants will have an exercise price that is up
to approximately 80% higher than the closing price of the Company's
common stock on the date the warrants are issued. These convertible note
hedge transactions and warrant transactions are expected to reduce the
potential dilution with respect to the Company’s common stock upon
conversion of the notes; however, the warrant transactions could have a
dilutive effect with respect to the Company’s common stock to the extent
that the market price per share of the Company’s common stock exceeds
the strike price of the warrants.
In connection with these hedging transactions, such dealers or their
affiliates expect to enter into various derivatives transactions and
engage in other activities that could have the effect of increasing or
preventing a decline in the price of the Company’s common stock in
connection with the pricing of the notes offering. These activities may
be discontinued at any time. In addition, in connection with any
conversion of the notes, the dealers or their respective affiliates may
enter into derivative transactions and engage in other activities that
could adversely impact the price of the Company’s common stock and of
the notes.
Repurchase of Common Stock From Purchasers of Notes
The Company currently intends to use a portion of the net proceeds of
the offering to repurchase shares of its common stock from purchasers of
notes in privately negotiated transactions effected through the initial
purchaser as the Company’s agent. The price of the common stock
repurchased in such transactions is expected to equal the closing price
per share of the Company’s common stock on the date of the pricing of
the offering. Repurchases of shares of the Company’s common stock could
increase, or prevent a decrease in, the market price of the Company’s
common stock or the notes. In the case of repurchases effected
concurrently with this offering, this activity could affect the market
price of the Company’s common stock concurrently with, or shortly after,
the pricing of the notes, and could result in a higher effective
conversion price for the notes.
Goldman, Sachs & Co. will act as the sole initial purchaser for resale
of the offering to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933.
This announcement does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities. Any offers of the notes
will be made only by means of a confidential offering circular. The
notes, the convertible note hedge transactions, the warrants and the
shares of the Company’s common stock underlying these securities have
not been and will not be registered under the Securities Act of 1933 or
the securities laws of any other jurisdiction and may not be offered or
sold in the United States without registration or an applicable
exemption from registration requirements.
ABOUT SANDISK
SanDisk Corporation (NASDAQ: SNDK), a Fortune 500 and S&P 500 company,
is a global leader in flash storage solutions. For more than 25 years,
SanDisk has expanded the possibilities of storage, providing trusted and
innovative products that have transformed the electronics industry.
Today, SanDisk’s quality, state-of-the-art solutions are at the heart of
many of the world's largest data centers, and embedded in advanced smart
phones, tablets and PCs. SanDisk’s consumer products are available at
hundreds of thousands of retail stores worldwide. For more information,
visit www.sandisk.com.
© 2013 SanDisk Corporation. All rights reserved. SanDisk is a trademark
of SanDisk Corporation, registered in the United States and other
countries.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements,
including statements regarding the Company’s intent to offer the notes
and enter into related transactions and the intended use of proceeds
from the proposed offering, that are based on the Company’s current
expectations and subject to numerous risks and uncertainties that may
cause these forward-looking statements to be inaccurate, including,
among others:
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difficulties or delays in pricing or closing the proposed offering;
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the anticipated terms of the offering and the notes;
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the anticipated use of proceeds of the offering of the notes,
including the Company’s ability to repurchase its outstanding
indebtedness on acceptable terms;
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whether the convertible note hedge transactions and warrant
transactions will become effective;
-
termination or suspension of the Company’s existing or anticipated
stock repurchase programs, which may occur at any time;
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fluctuations in the market price of the Company’s common stock; or
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the other risks detailed from time-to-time in the Company’s Securities
and Exchange Commission filings and reports, including, but not
limited to, the Company’s most recent quarterly report on Form 10-Q
and annual report on Form 10-K.
Such risks and uncertainties could harm the Company’s business,
financial condition and results of operations. The Company undertakes no
obligation to update the information contained in this press release.
Copyright Business Wire 2013