Ligand Pharmaceuticals said it plans to raise $550 million through a private placement of convertible senior notes due 2031, with an additional $82.5 million available if initial purchasers exercise a 13-day option.
The company said it expects to use part of the proceeds to pay for convertible note hedge transactions, partially offset by warrant sale proceeds, and up to $75 million to repurchase shares from note buyers in privately negotiated transactions. The remaining proceeds are slated for general corporate purposes, including investments in complementary businesses, companies, products and technologies.
The notes will mature on Sept. 15, 2031, and interest will be paid semiannually beginning March 15, 2027. Ligand said the notes will be senior unsecured obligations. Upon conversion, Ligand will pay cash up to the principal amount, with any excess settled in cash, shares, or both at the company’s election.
Ligand said the hedge transactions are intended to reduce potential dilution from conversion, while the warrant transactions could create dilution if its stock trades above the warrants’ strike price. The company also said the repurchases are expected to be priced at the last reported share price on the pricing date.
If the full $82.5 million option is exercised, the offering size would rise to $632.5 million. As a result of these announcements, the company's shares have moved -7.79% on the market, and are now trading at a price of $253.46. For more information, read the company's full 8-K submission here.
