Priceline prices $500 million convertible notes offering

Priceline prices $500 million notes offering

NORWALK, Conn. — Travel Web site Priceline.com Inc. said Thursday it has priced a $500 million offering of convertible senior notes maturing in 2015.

The notes will pay an interest twice a year at an annual interest rate of 1.25 percent. Under certain situations, the notes may be converted into cash and Priceline.com stock.

Priceline said it expects to receive about $488.4 million from the offering, after fees and expenses. It said it will use the funds to buy back $100 million of common shares in privately-negotiated deals and may use the rest for additional share buybacks, paying down debt, acquisitions and other general corporate purposes.

The new notes may be exchanged for cash up to the principal amount, anything above that may be converted into stock or a combination of shares and cash.

Every $1,000 worth of notes may be converted into 3.2997 Priceline shares. That’s equal in cash to about $303.06 per share, or 30 percent above the stock’s closing price on March 4.

Initial buyers will get a 30-day option to buy up to $75 million more notes to cover over-allotments from better-than-expected demand.

The sale of the notes and share buyback are expected to be completed on March 10.

Priceline shares rose $2.68, or 1.2 percent, to $235.80 in late morning trading.