Yahoo! Inc. (NASDAQ:YHOO) Announces Pricing Of Its Convertible Notes

Boston, MA, 11/22/2013 (wallstreetpr) – Yahoo! Inc (NASDAQ:YHOO) announced the pricing of its $1.25 billion convertible five year notes, besides raising the limit by 25%. Initially Yahoo was looking to raise $1 billion only through this route. The allowable over-allotment limit was also raised to $187.5 million. The notes are due to mature in 2018 and are expected to convert at $53.43 per share. The company will be paying half-yearly interest on them on the first of June and December, every year till they mature. The interest payout will start from June 1, 2014.

Yahoo plans to use the proceeds to finance cash convertible note hedge transactions besides finance buyback of $200 million of common stocks through private negotiations. Balance proceeds will be used for general corporate purposes including working capital needs, buy-backs and to finance acquisitions. The company reported $1.83 billion of cash and short term investments at the end of the third quarter. Yahoo also spent $77.7 million on CAPEX in the third quarter.

Yahoo! Inc (NASDAQ:YHOO) is proceeding aggressively on acquisitions and has spent $218 million in the first nine months to takeover 17 companies. This is apart from the $990 million it spent to takeover Tumblr, the blogging platform in May, 2013. Some of the past acquisitions had saddled the company with a number of unwanted domain names. Yahoo! Inc (NASDAQ:YHOO) conducts regular auction of these names. In one of the recent auction, it was able to sell one domain name, for $137,500. Though more than 100 domain names were on sale, many could not reach the reserve prices. Yahoo had sold to Monster Worldwide Inc (NYSE:MWW) for a staggering $225 million in 2010. This domain was acquired when Yahoo purchased for $439 million.

Yahoo also announced an additional buyback of $5 billion of the company’s common stock. This is apart from the buyback of $5.3 billion in the first nine months. Yahoo had purchased back its stocks worth $1.66 billion in the third quarter.

The share of Yahoo! Inc (NASDAQ:YHOO) were trading at $36.30 per share after touching the six-year high of $36.66.

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Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at or follow Nicholas Kitonyi @nmaithyak on Twitter.

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