8-KOther Events

EQUINIX INC 8-K Report, Corporate Update (Mar 28, 2012)

Filed March 28, 2012For Securities:EQIX

Summary

Equinix, Inc. (EQIX) filed an 8-K on March 28, 2012, detailing its settlement strategy for its maturing 2.50% Convertible Subordinated Notes due 2012. The Company announced its intention to settle any conversions of these notes, which mature on April 15, 2012, with a combination of cash and common stock. Specifically, up to 100% of the principal amount will be settled in cash, with any remaining obligation met by issuing shares of Equinix's common stock. This settlement approach is significant as it allows Equinix to manage potential dilution. By utilizing a cash and stock mix, the company aims to avoid issuing a larger number of shares than necessary. This filing also provides an update on the company's share repurchase program, indicating that a portion of the authorized buyback has been completed, demonstrating a commitment to returning value to shareholders.

Key Highlights

  • 1Equinix announced its settlement plan for $250.0 million in 2.50% Convertible Subordinated Notes due April 15, 2012.
  • 2The company will settle conversions primarily in cash (up to 100% of principal) and the remainder in common stock.
  • 3This cash and stock settlement strategy aims to mitigate dilution, avoiding the issuance of approximately 1.6 million shares.
  • 4As of March 28, 2012, $250.0 million in principal amount of these notes was outstanding.
  • 5The conversion price for the notes is approximately $112.03 per share.
  • 6The number of shares issued will be determined by the volume-weighted average price (VWAP) of Equinix's common stock during a specified ten-day trading period leading up to maturity.
  • 7Equinix has repurchased approximately 1.0 million shares under its $250.0 million share repurchase program initiated in November 2011.

Frequently Asked Questions

The Notes are due to mature on April 15, 2012.

Equinix intends to settle any conversions with a combination of cash and common stock. Up to 100% of the principal amount will be paid in cash, and any remaining obligation will be settled in shares of Equinix's common stock.

By settling with a mix of cash and stock, Equinix plans to avoid issuing a significant number of shares. Had they settled entirely in stock, approximately 1.6 million additional shares would have been issued. The exact number of shares to be issued will depend on the stock's volume-weighted average price during a specific period before maturity.

As of March 27, 2012, Equinix had repurchased approximately 1.0 million shares under its program to buy back up to $250.0 million of its common stock, which was announced in November 2011 and is set to continue through December 31, 2012.