Ligand announces proposed offering of $400M of convertible senior notes

Ligand (LGND) announced its intention to offer $400.0 million aggregate principal amount of convertible senior notes due 2030 in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, subject to market conditions and other factors. Ligand also expects to grant to the initial purchasers of the notes a 13-day option to purchase up to an additional $60.0 million aggregate principal amount of notes. The notes will be general unsecured, senior obligations of Ligand and will accrue interest payable semiannually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026. The notes will mature on October 1, 2030, unless earlier converted, redeemed or repurchased. Upon conversion of the notes, Ligand will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of Ligand’s common stock or a combination of cash and shares of Ligand’s common stock, at Ligand’s election, in respect of the remainder, if any, of Ligand’s conversion obligation in excess of the aggregate principal amount of the notes being converted. The interest rate, initial conversion rate, redemption or repurchase rights and other terms of the notes will be determined at the time of pricing of the offering. Ligand expects to use a portion of the net proceeds from the offering to pay the cost of the convertible note hedge transactions. In addition, Ligand expects to use up to $30 million of the net proceeds from the offering to repurchase shares of its common stock from certain purchasers of the notes in privately negotiated transactions, as described below. Ligand intends to use the remaining net proceeds from the offering for general corporate purposes including investing in complementary businesses, companies, products and technologies, although Ligand has no present commitments or agreements to do so. If the initial purchasers exercise their option to purchase additional notes, Ligand expects to sell additional warrants to the option counterparties and use a portion of the net proceeds from the sale of the additional notes, together with the proceeds from the sale of the additional warrants, to enter into additional convertible note hedge transactions and the remaining net proceeds for general corporate purposes.