Micron higher outright on buyout rumor; SanDisk in focus; WPX Energy plans mandatory deal

By Rebecca Melvin

New York, July 14 – U.S. convertibles were a little more active on Tuesday compared to a quiet session on Monday, as equities continued to rise.

The takeover chatter in Micron Technology Inc. may have contributed to some of the better action, a New York-based trader said.

Micron was rumored to be getting a bid from China’s Tsinghua Unigroup chip maker as early as Wednesday. Micron had not yet received an offer, the company said, but speculation sent the underlying shares of the Boise, Idaho-based chipmaker up 11%.

Related to the Micron rumor, SanDisk Corp. was in focus as the Milpitas, Calif.-based flash memory chip maker is also a takeover candidate.

SanDisk’s 1.5% convertibles due 2017 traded at 126.6 with the underlying shares around $55.50.

Last week the SanDisk 1.5% convertibles traded at 129.6 with the shares a dollar higher at $56.50.

In primary action, WPX Energy Inc. launched an offering of $300 million of mandatory convertible preferred shares, together with $1.2 billion of straight notes and 27 million shares of common stock, to help fund its acquisition of RKI Exploration and Production LLC. WPX shares rose 71 cents, or 6%, to $11.83.

Energy convertibles in general were quiet, however, with neither the new mandatory deal nor crude-oil market volatility spurring trading action.

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