SILVER SPRING, Md.
Oct. 11, 2011
/PRNewswire/ -- United Therapeutics Corporation (NASDAQ: UTHR) (the "Company") today announced that it intends to offer, subject to market and other conditions,
aggregate principal amount of convertible senior notes due 2016 to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Company also expects to grant to the initial purchaser of the notes an option to purchase up to an additional
aggregate principal amount of notes, solely to cover over-allotments, if any. The interest rate, conversion price and other terms of the notes will be determined at the time of pricing of the offering.
In order to reduce the potential dilution of the Company's common stock upon future conversion of the notes, the Company expects to enter into a convertible note hedge transaction with a financial institution that is an affiliate of the initial purchaser of the notes. The Company also expects to enter into a separate warrant transaction with the same counterparty.
Using the proceeds to the Company from the warrant transaction and the balance of the net proceeds of the offering after purchasing the convertible note hedge, together with cash on hand, the Company intends to repurchase a variable number of shares of its common stock for up to approximately
, pursuant to an accelerated share repurchase agreement to be entered into with an affiliate of the initial purchaser. The accelerated share repurchase will be part of a broader share repurchase program authorized by the Company's board of directors, for up to
in the Company's common stock.
The Company has been advised that, in connection with hedging the convertible note hedge, warrant and accelerated share repurchase transactions described above, the Company's counterparty or its affiliates may purchase Company common stock and enter into various derivative transactions with respect to the Company's common stock at, and possibly after, the pricing of the notes. These activities could have the effect of increasing or preventing a decline in the price of the Company's common stock concurrently with and possibly following the pricing of the notes. In addition, such counterparty or its affiliates, may purchase or sell the Company's common stock in secondary market transactions following the pricing of the notes. The Company has been further advised that the counterparty or its affiliates are likely to modify their respective hedge positions from time to time prior to conversion or maturity of the notes by purchasing and selling shares of the Company's common stock, other Company securities or other instruments they may wish to use in connection with such hedging. The effect, if any, of any of these transactions and activities on the market price of the Company's common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of our common stock and the value of the notes.