Medtronic prices maximum, any-and-all offers, tallies early tenders

By Marisa Wong

Morgantown, W.Va., March 7 – Medtronic plc announced the pricing terms of the cash tender offers by its wholly owned subsidiaries, Medtronic, Inc. and Covidien International Finance SA, for any and all of the $3.1 billion aggregate principal amount of outstanding notes from two series and up to $3.7 billion combined aggregate purchase price for outstanding notes from nine series.

Medtronic launched the tender offers on Feb. 20 and on March 4 upsized the maximum purchase price (which excludes accrued interest) under the maximum offer to $3.7 billion from $1.9 billion and the series tender cap on Covidien’s 6.55% senior notes due 2037 to $90 million from $75 million.

The company announced on Thursday that it anticipates accepting additional maximum tender offer notes. Under the offer, the company may accept up to an additional 2% of the applicable securities without extending the tender offers. This effectively increases the aggregate maximum purchase price to about $3.8 billion and the series tender cap on the Covidien 6.55% notes due 2037 to roughly $90.5 million.

The total consideration for each series of notes is based on the applicable reference yield plus a fixed spread and is payable to holders who tendered their notes on or before 5 p.m. ET on March 5, the early tender deadline. The total consideration for each series of notes includes an early tender premium of $30.00 per $1,000 principal amount of notes. Pricing was determined at 11 a.m. ET on March 6.

Medtronic accepted the following notes under the any-and-all offer:

• All $1,768,138,000 of tendered Medtronic 2.5% senior notes due 2020, with $2.5 billion principal amount outstanding, for a total consideration of $1,000 per $1,000 principal amount, based on the 1.625% U.S. Treasury due March 15, 2020 and a fixed spread of 15 basis points; and

• All $350.09 million of tendered Covidien 4.2% senior notes due 2020, with $600 million principal amount outstanding, for a total consideration of $1,018.02 per $1,000 principal amount, based on the 1.5% U.S. Treasury due June 15, 2020 and a fixed spread of 15 bps.

Medtronic accepted the following notes under the maximum offer, with the notes listed in order of acceptance priority and with pricing per $1,000 principal amount:

• All $90,503,000 of tendered Covidien 6.55% senior notes due 2037, with $374,039,000 outstanding, at a purchase price of $1,321.54, based on the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 100 bps;

• All $117,051,000 of tendered Medtronic 6.5% senior notes due 2039, with $300 million outstanding, at a purchase price of $1,322.57, based on the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 105 bps;

• All $194.09 million of tendered Medtronic 5.55% senior notes due 2040, with $500 million outstanding, at a purchase price of $1,224.06, based on the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 90 bps;

• All $473,406,000 of tendered Medtronic 4.625% senior notes due 2044, with $650 million outstanding, at a purchase price of $1,119.18, based on the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 80 bps;

• All $271.35 million of tendered Medtronic 4.5% senior notes due 2042, with $400 million outstanding, at a purchase price of $1,086.52, based on the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 85 bps;

• $2,186,659,000 of $2,650,537,000 tendered Medtronic 4.625% senior notes due 2045, with $4.15 billion outstanding, at a purchase price of $1,123.45, based on the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 80 bps;

• None of the $1,621,731,000 tendered Medtronic 4.375% senior notes due 2035, with $2,381,619,000 outstanding. The purchase price would have been $1,072.47, set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 70 bps;

• None of the $200.07 million tendered Medtronic 4.125% senior notes due 2021, with $500 million outstanding. The purchase price would have been $1,024.55, set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 15 bps; and

• None of the $32,582,000 tendered Medtronic 4% senior notes due 2043, with $325,024,000 outstanding. The purchase price would have been $1,004.85, set using the 3.375% U.S. Treasury note due Nov. 15, 2048 plus 90 bps.

Holders will also receive accrued interest to but excluding the relevant settlement date.

The offers will expire at 11:59 p.m. ET on March 19.

Early settlement is expected to occur on March 11 and final settlement on March 21.

The offers are subject to a financing condition.

The remaining 2.5% notes due 2020 and the 4.2% notes due 2020 may be called for redemption on March 7, the company said in a previous announcement.

Barclays (212 528-7581 or 800 438-3242) and BofA Merrill Lynch (980 387-3907 or 888 292-0070) are the dealer managers.

Global Bondholder Services Corp. (866 470-4200 or 212 430-3774) is the information and tender agent.

Medtronic is a medical technology company based in Minneapolis.

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