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.