Chattem to pay cash for any notes converted in connection with merger

By Angela McDaniels

Tacoma, Wash., Jan. 28 - Chattem, Inc. expects its acquisition by sanofi-aventis SA to occur on or after Feb. 9 and said holders who convert their 2% convertible senior notes due 2013 or 1.625% convertible senior notes due 2014 in connection with this fundamental change will receive cash instead of shares.

Noteholders have the right to convert at any time before the close of business on the business day immediately preceding the 45th day after the fundamental change effective date, according to a company news release.

A subsidiary of sanofi-aventis began a $93.50-per-share tender offer for Chattem's stock on Jan. 11. It is scheduled to expire at midnight ET on Feb. 8.

The 2% convertibles and 1.625% convertibles have conversion prices of $58.92 and $73.20, respectively.

The tender offer is conditioned on the majority of Chattem's shares being tendered, and the offer and merger remain subject to some closing conditions.

Chattanooga, Tenn.-based Chattem makes branded consumer health-care products, toiletries and dietary supplements.

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