Morning Commentary: Carbonite convertibles surge outright on takeout news, but are seen unchanged on swap

By Rebecca Melvin

New York, Nov. 11 – Carbonite Inc.’s 2.5% convertible senior notes due 2022 jumped about 15 points on an outright basis on Monday after news that the Boston-based cybersecurity firm inked a definitive agreement to be acquired by OpenText Corp. for $23 per share in cash.

The price represented a 25% premium to Carbonite’s Friday closing stock price.

On a dollar neutral basis, the bonds were seen roughly unchanged, depending on the delta hedge percentage on which traders were set up, a New York-based market source said.

They were seen trading around 105.625 with the underlying stock up about $4.50, or 24.4%, at $22.90, the market source said. Prior to the news, the bonds were trading around 90 to 91.

Carbonite priced the $143.75 million bond issue in March 2017.

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