GSI Commerce Announces Notice of Conversion of 2.50% Convertible Senior Notes due 2027
12 Mai 2011 - 2:00PM
Business Wire
GSI Commerce, Inc. (NASDAQ:GSIC), a leading provider of
ecommerce and interactive marketing services, today announced that
pursuant to the terms of the indenture relating to GSI’s 2.50%
Convertible Senior Notes due 2027 (the “Notes”), the Notes have
become convertible as a result of the previously announced
agreement to be acquired by eBay Inc. (NASDAQ: EBAY). The Company
currently anticipates that the effective date of the merger will be
June 17, 2011.
As a result of GSI entering into the merger agreement with eBay,
holders of the Notes are entitled to convert their Notes in whole
or in part (in principal amounts of $1,000 and integral multiples
thereof) at any time from and after May 12, 2011 until (but not
including) the date which is the Fundamental Change Repurchase Date
(as described below).
On or prior to the effective date of the merger, holders of the
Notes may convert each $1,000 in principal amount of the Notes into
33.3333 shares of GSI common stock. After the effective date of the
merger, the right to convert each $1,000 in principal amount of the
Notes shall be changed into the right to receive upon conversion
$974.99 in cash (representing the $29.25 per share cash
consideration payable in the merger in respect of the shares of GSI
common stock otherwise issuable upon conversion of the Notes).
In addition, the merger will constitute a “Makewhole Fundamental
Change” under the terms of the indenture governing the Notes.
Accordingly, upon the consummation of the merger, GSI will increase
the conversion rate applicable to the Notes (for holders that
convert their Notes from the date hereof until the Fundamental
Change Repurchase Date) by adding to the conversion rate that would
otherwise apply to the Notes the Additional Shares determined in
accordance with the terms of the indenture. Assuming the Merger is
consummated on June 17, 2011, as currently anticipated, the
conversion rate will be increased by 5.21 Additional Shares and
accordingly each $1,000 in principal amount of the Notes would be
entitled to receive upon conversion an aggregate cash payment of
$1,127.39. If the Effective Date of the Merger is delayed, the
amount of Additional Shares to be added to the conversion rate will
be changed in accordance with the terms of the indenture governing
the Notes.
Any holder of Notes who converts on or after May 12, 2011 and on
or prior to the effective date of the merger will initially receive
33.3333 shares of GSI common stock for each $1,000 in principal
amount of the Notes, and will then receive, as soon as practicable
following the effective date of the merger, a cash payment
representing the number of Additional Shares times $29.25 per
$1,000 principal amount of Notes previously converted. Any holder
who converts after the effective date of the merger and on or prior
to the Fundamental Change Repurchase Date will receive a cash
payment in the aggregate amount of $974.99 plus an amount
representing the number of Additional Shares times $29.25 per
$1,000 principal amount of Notes. The payments respecting the
Additional Shares will only be made if the merger is in fact
consummated.
Additionally, pursuant to the indenture, any holder who converts
after May 15, 2011 but prior to June 1, 2011 will be required to
pay in cash an amount equal to the interest payment respecting the
Notes so converted to be made by GSI on June 1, 2011 to holders of
record on May 15, 2011.
The Notes will cease to be convertible on the Fundamental Change
Repurchase Date unless and until they again become convertible in
accordance with their terms.
Pursuant to the indenture under which the Notes were issued, the
merger will also constitute a “Fundamental Change” and upon
consummation, GSI is required to make an offer to repurchase on the
Fundamental Change Repurchase Date any Notes that remain
outstanding at such time (provided the holders of such Notes do not
elect to convert such Notes as set forth above) at a repurchase
price equal to the Notes’ principal amount, plus any accrued and
unpaid interest. This offer to purchase Notes will be at a price
that is less than the amount that can be obtained upon conversion
of the Notes on or prior to the Fundamental Change Repurchase Date,
as described above. The Company will be required to make such offer
within 15 days after the effective date of the merger (such offer,
the “Fundamental Change Repurchase Right Notice”). The Fundamental
Change Repurchase Date will be the date specified by GSI that is
not less than twenty (20) or not more than thirty (30) days after
the date of the Fundamental Change Repurchase Right Notice.
In the event the merger is not consummated, any Notes that have
not been converted will remain outstanding under the terms of the
indenture governing the Notes.
About GSI Commerce
GSI Commerce® enables ecommerce, multichannel retailing and
digital marketing for global enterprises in the U.S. and
internationally. GSI’s ecommerce services, which include
technology, order management, payment processing, fulfillment and
customer care, are available on a modular basis or as part of an
integrated solution. GSI’s Global Marketing Services division
provides innovative digital marketing products and services
comprised of database management and segmentation, marketing
distribution channels, a global digital agency to drive strategic
and creative direction and an advanced advertising analytics and
attribution management platform. Additionally, GSI provides brands
and retailers platforms to engage directly with consumers through
RueLaLa.com, an online private sale shopping destination, and
ShopRunner.com, a members-only shopping service that offers
unlimited free two-day shipping and free shipping on returns for a
$79 annual subscription.
Caution Regarding Forward Looking Statements
This news release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical facts, are forward-looking
statements. These forward looking statements address, among other
things activities, events or developments that we expect, believe
or anticipate will or may occur in the future, including our
statements relating to the anticipated effective date of the
proposed merger eBay. These forward-looking statements are subject
to a number of risks that could cause actual results to differ
materially from those contained in the forward-looking statements,
including the risk that our stockholders may not approve the
merger, as well as the risk factors described in Part I, Item 1A,
of our 2010 Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 1, 2011 and Part II, Item 1A, of
our Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 5, 2011.
Currently unknown or unanticipated risks, or risks that emerge
in the future, could cause actual results to differ materially from
those described in forward-looking statements, and it is not
possible for us to predict all such risks, or the extent to which
this may cause actual results to differ from those contained in any
forward-looking statement. Except as required by law, we assume no
obligation to update publicly any such forward-looking statements,
whether as a result of new information, future events, or
otherwise.
Gsi Commerce (NASDAQ:GSIC)
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