Yahoo raises $1.23 bn from sale of convertible notes

Technology giant Yahoo! said it has raised about USD 1.23 billion through sale of its securities and the proceeds would be utilised for strategic transactions, and working capital needs, among others.

Last month, the US-based firm had proposed to offer a total of $1.25 billion aggregate principal amount of its convertible senior notes due 2018, subject to market conditions and other factors, in a private placement.

"Net proceeds from sale of the Notes were approximately $1.23 billion, after deducting Initial Purchasers' discount and the estimated offering expenses payable by the company," Yahoo said in a filing to the US Securities and Exchange Commission (SEC) yesterday.

The firm used about $70.4 million of proceeds from the notes to pay the cost of the privately negotiated convertible note hedge transactions described and used about $87.5 million to repurchase 2,457,800 shares, it added.

"Yahoo expects to use the remainder of the net proceeds for general corporate purposes, including, but not limited to, acquisitions or other strategic transactions, additional repurchases of common stock and working capital," it said.

The company said on November 26, 2013, it completed its previously announced offering of $1.25 billion aggregate principal amount convertible senior notes due 2018.

The notes were sold in a private placement in a purchase agreement, dated November 20, 2013, entered into by and among Yahoo! and J P Morgan Securities and Goldman, Sachs, as representatives of the several initial purchasers.

"The Company also granted the initial purchasers an over- allotment option to purchase, within 30 days from November 20, 2013, up to an additional $187.5 million aggregate principal amount of the notes on the same terms and conditions," the filing said.

The notes will be convertible into Yahoo shares at an initial conversion rate of 18.7161 shares per $1,000 principal amount of notes (which is equivalent to an initial conversion price of about $53.43 per share), subject to adjustment upon the occurrence of certain events, it added.

The initial conversion price represents a premium of around 50 per cent to the $35.62 per share closing price of Yahoo's common stock on November 20, 2013. Upon conversion of the notes, holders will receive cash or shares of Yahoo's common stock or a combination thereof, at Yahoo' election.