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Medicis Announces Offering of $400 Million of Convertible Notes

Thursday, May 10, 2012 7:21 AM

SCOTTSDALE, Ariz., May 10, 2012 (GLOBE NEWSWIRE) -- Medicis (NYSE:MRX) (the "Company") today announced that it intends, subject to market and other conditions, to offer $400 million aggregate principal amount of convertible senior notes due 2017 (the "Convertible Notes") in an offering registered under the Securities Act of 1933, as amended (the "Securities Act"). The Company expects to grant an option to the underwriters for up to an additional $50 million aggregate principal amount of Convertible Notes solely to cover overallotments. The Convertible Notes are expected to pay interest semiannually and will be convertible into cash up to the aggregate principal amount of Convertible Notes to be converted and cash, shares of the Company's Class A common stock ("Common Stock") or a combination of cash and shares of the Company's Common Stock, at the Company's election in respect of the remainder, if any, of the Company's conversion obligation in excess of the aggregate principal amount of the Convertible Notes to be converted, based on a conversion rate to be determined. The Convertible Notes will mature on June 1, 2017, unless repurchased or converted in accordance with their terms prior to such date. Prior to March 1, 2017, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date.

In connection with the offering, the Company expects to enter into convertible note hedge transactions in respect of its Common Stock with one or more affiliates of the underwriters of the Convertible Notes (the "Option Counterparties"). These convertible note hedge transactions are expected to reduce the potential dilution to the Company's Common Stock and/or offset any cash payments the Company is required to make in excess of the principal amount upon conversion of the Convertible Notes. In addition, the Company expects to enter into separate warrant transactions with the Option Counterparties at a higher strike price. The warrant transactions would separately have a dilutive effect to the extent that the market value per share of the Company's Common Stock exceeds the applicable strike price of the warrants. If the underwriters exercise their option to purchase additional Convertible Notes, the Company may enter into additional convertible note hedge and warrant transactions with the Option Counterparties.

The Company expects to use the net proceeds for general corporate purposes, which may include working capital, capital expenditures, repurchasing shares of the Company's Common Stock from time to time, repaying the Company's outstanding debt and corporate acquisitions.


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