May 17, 2010
In May 2010, SY agreed to be acquired by SAP for $65 cash. The deal was expected to be completed by mid July 2010. The next coupon is 8/15/10.
However, the indenture says you can hold the convert for between 20 to 30 days after the closing date before converting. In that case, if you convert after record date (8/1/10), you will get that next coupon 8/15/10
Section 3.7 says that the company has up to 20 days after the deal closes to put out a fundamental change notice. In this notice, they must announce a day for the repurchase of the bonds which is between 20-35 days later (repurchase date).
If holders convert up to the business day prior to the fundamental change repurchase date as discussed above, that will be deemed to be “in connection” with the fundamental change and entitles you to the make whole.
Section 4.2 (c) says that if the fundamental change repurchase date is in between the record and pay date (Aug 1-15), then you also get to keep the interest.
So if the deal closes on July 15 and the company gives the notice immediately, then the earliest repurchase date would be Aug 4, which is after the record date, so you would keep the accrued.
May 26, 2010
The SAP tender offer for SY will expire 7/1/10. The deal needs EU approval which takes 35 calandar days from the date of filing. SAP has not yet filed with the EU. If sap were to file on May 27, it would take at the deal to 7/1/10. Any delay would cause the deal close to get pushed back. In order to make sure we get the next coupon, the deal has to close 7/13 or after.
July 19, 2010
SAP extended the tender offer for SY to July 26
July 30, 2010
SAP closes acquisition of SY. Convert holders get the last coupon.
The following is the press release:
Sybase, Inc. Announces Closing of Merger and Entry into Supplemental Indenture Relating to its 3.50% Convertible Senior Notes Due 2029
DUBLIN, CALIF. – JULY 30, 2010 – Sybase, Inc., an industry leader in enterprise and mobile software, today announced that it is delivering notice to the holders of its 3.50% Convertible Senior Notes Due 2029 of the closing on July 29, 2010 of the “second-step” cash merger of Sheffield Acquisition Corp., a wholly owned subsidiary of SAP America, Inc., with and into Sybase at a price of $65.00 per share, with Sybase being the surviving entity.
As more fully described in the notice of the merger being delivered to noteholders, pursuant to the indenture under which the notes were issued, the notes are convertible in connection with the merger and continue to be convertible under other sections of the indenture as set forth in the Fundamental Change Notice and Non-Stock Fundamental Change Notice dated July 27, 2010(the “Fundamental Change Notice”).
Sybase also today announced that it has entered into a supplemental indenture on July 29, 2010 with U.S. Bank National Association, the trustee under the indenture with respect to the notes, providing that from and after the effective time of the merger, each $1,000 principal amount of notes will be, at the option of the noteholders, convertible into the amount of cash equal to the per share merger consideration multiplied by the conversion rate. The conversion rate for conversions submitted on or prior to the close of business on August 17, 2010 will be 22.9939, and we expect the conversion rate for conversions submitted after the close of business on August 17, 2010 to be 20.8836, each as subject to the terms of the indenture and as more fully described in the Fundamental Change Notice.
Noteholders should read carefully the notice they have received or will be receiving regarding their conversion rights resulting from the merger and their conversion rights and rights to require Sybase to repurchase their notes as set forth in the Fundamental Change Notice, as each contains important information as to the procedures and timing for the exercise of such rights, as well as information regarding the interest payable by Sybase on such notes.