Millennium starts tender COR Therapeutics convertibles, considering adding put option

By Peter Heap

New York, March 14 - Millennium Pharmaceuticals, Inc. announced a change-of-control tender for the convertibles it assumed in its recent merger with COR Therapeutics, Inc. but added that it is considering offering holders a put option to discourage them from participating in the offer.

As required under the note indentures, the Cambridge, Mass. biopharmaceutical company is offering par plus accrued interest for COR's 4½% convertible senior notes due June 15, 2006 and 5% convertible senior notes due March 1, 2007.

The offer runs through 9.00 a.m. ET on April 29.

Millennium assumed the $600 million of notes - $300 million of each issue - as part of its merger with COR on Feb. 12 and the notes are now convertible into Millennium stock.

But the company also said it is looking at adding an additional put feature to the notes, exerciseable at a future date.

Holders currently have three options, explained Cynthia Clayton, Millennium's manager of investor relations. They can convert to stock, put the notes for cash or hold on to them.

"Converting to stock is not an attractive option right now because of where the stock price is," Clayton told Prospect News.

"In an effort to encourage the bondholders to hold on to these notes rather than sell them in the next 45 days we are in discussions internally as to what we can do" to make it more attractive to hold on to the notes.

Millennium has not reached the point of setting terms put Clayton said a put exerciseable in a year's time is "probably a reasonable time frame to consider."

Millennium said it will announce any change no later than April 22.

Millennium stock closed at $24.77 Wednesday. The 4.5s are convertible at $40.61 while the 5s are convertible at $68.43, both adjusted for the merger.

The dealer manager for the change of control offer is Morgan Stanley.

Millennium has previously stated in Securities and Exchange Commission that it will use its cash and marketable securities to fund the change of control offer although it has also noted that if a "large" number of noteholders tender their securities its cash will be "substantially diminished."

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