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VeriFone Prices $275 Million Senior Convertible Notes


VeriFone Holdings, Inc. (NYSE: PAY) today announced the pricing of $275 million principal amount of 1.375% Senior Convertible Notes due 2012 through an offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the offering, VeriFone also granted the initial purchasers a 13-day option to purchase up to an additional $41.25 million principal amount of notes. The offering is scheduled to close on June 22, 2007, subject to satisfaction of customary closing conditions.

The notes will pay interest semiannually at a rate of 1.375% per annum. The notes will be convertible under certain circumstances into cash and, if applicable, shares of common stock at an initial conversion rate of 22.7190 shares of common stock per $1,000 principal amount of notes, equivalent to a conversion price of approximately $44.02 per share. Upon conversion, VeriFone would deliver cash and shares of common stock, if applicable, based on a daily conversion value under the terms of the notes. Unless and until VeriFone obtains stockholder approval to increase its authorized capital, the maximum number of shares available for issuance upon conversion would be 3,250,000 in the aggregate.

In connection with the pricing of the notes, VeriFone has entered into convertible note hedge transactions with affiliates of the initial purchasers of the notes (the “counterparties”) that generally are expected to reduce the potential equity dilution upon conversion of the notes. VeriFone also has sold warrants to those counterparties, which could have a dilutive effect on its earnings per share. The warrants have an initial strike price of $62.356 per share which may reset, if higher, to a 70% premium over the market price of VeriFone’s common stock determined in approximately six months from the pricing of the notes.

In connection with establishing their initial hedge of these transactions, the counterparties, and/or their affiliates, may enter into various derivative transactions with respect to VeriFone’s common stock or purchase shares of VeriFone’s common stock prior to, concurrently with, or shortly after the pricing of the notes. These activities could have the effect of increasing or preventing a decline in the price of VeriFone’s common stock prior to, concurrently with or following the pricing of the notes. In addition, the counterparties (and/or their affiliates) may modify their hedge positions from time to time by entering into or unwinding various derivative transactions with respect to VeriFone’s common stock or by selling or purchasing VeriFone’s common stock in secondary market transactions (including during any conversion period related to the conversion of the notes), which could adversely affect the value of VeriFone’s common stock and, as a result, the value of the notes or could have the effect of increasing or preventing a decline in the value of VeriFone’s common stock.

VeriFone estimates that the net proceeds from the offering, after deducting the initial purchasers’ discounts and estimated offering expenses payable by VeriFone will be approximately $267.45 million, assuming the initial purchasers do not exercise their option to purchase additional notes. VeriFone intends to apply the net proceeds from the offering and the convertible note hedge and warrant transactions to repay in part the senior secured bank debt of VeriFone’s principal operating subsidiary, VeriFone, Inc.

This notice does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the securities will be made only by means of a private offering memorandum. The securities and the shares of VeriFone common stock issuable upon conversion or exercise of the securities have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.


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