Anacor bonds contract on swap on takeout news; Teligent adds; Wright Medical extends gains

By Rebecca Melvin

New York, May 16 – Anacor Pharmaceuticals Inc.’s convertibles surged by 38 points on an outright basis on Monday but fell on a dollar-neutral, or hedged, basis after news that Pfizer Inc. said it would buy the Palo Alto, Calif.-based biopharmaceutical company for about $4.5 billion in cash.

The takeout price is for $99.25 a share, and those shares shot up in reaction by 57% to more than $100.00 on the Nasdaq stock exchange.

On a swap basis, the Anacor 2% convertibles contracted 3.5 points to 5 points, but most arb players were down by the 5-point loss amount, a Connecticut-based trader said.

Teligent Inc.’s 3.75% convertibles traded up by about 3 points to 82 along with a 3% rise in the underlying shares the Buena, N.J.-based specialty generic pharmaceutical company to $5.32 after it announced it received regulatory approval for its Triamcinolone Acetonide Ointment USP 0.1% – its fourth prescription topical ANDA approved by the FDA so far this year, the company said in a release.

Wright Medical Group NV’s convertibles extended gains after the Amsterdam-based orthopedic medical device company priced a new issue of 2.25% convertibles due 2022 in a private placement and exchange agreement last week. The new issue of $395 million of 5.5-year convertible senior notes traded at almost 107, which was up from trades at 102.5 to 103 on Friday.

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