Amgen Plans Debt Sale, Stock Buyback

The company will repurchase up to $3 billion of its shares.
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Amgen

(AMGN) - Get Report

plans to sell $4 billion of convertible debt, with part of the proceeds going to fund a massive stock buyback.

The Thousand Oaks, Calif., biotechnology company said Monday that half of the notes will be due in 2011 and the other half will mature in 2013. The notes will be sold to institutional buyers.

Amgen expects to use the proceeds from the offering and funds from a group of warrant transactions to repurchase roughly $3 billion worth of its shares. Other proceeds will be used for hedge transactions that Amgen expects to arrange with the buyers of the notes. The hedge transactions are meant to offset the dilution to Amgen's common stock if the notes are converted.

Amgen is planning a series of separate warrant transactions with one or more of the initial purchasers or their affiliates. Any remaining proceeds will be added to Amgen's working capital and used for general corporate purposes.

Shares of Amgen were up 37 cents to $71.51 in after-hours trading.