Avid Bioservices dives after $160 mln convertible offering priced

Avid Bioservices

07/03/2024 13:38

** Shares of Avid Bioservices  CDMO.O  dive 32.4% premarket
to $5.94, lowest since Jan 8, after contract drugmaker prices
convertible notes offering
    ** Co late Weds announced private offering of $160 mln 7%
convertible bonds (CBs) due 2029
    ** Initial conversion price of $9.89 represents 12.5%
premium to stock's last close
    ** Co plans to use net offering proceeds to repurchase
portion of its 1.25% exchangeable notes due 2026
    ** Avid late Weds also released preliminary results for
fiscal Q3, including rev of $33.8 mln, down 11% yr/yr, and
maintained rev guidance for FY24 of $137-$147 mln
    ** CBs are securities that can convert into stock or cash if
certain conditions are met
    ** With this offering, Avid joins a slew of firms raising
capital in CB deals, amid higher-for-longer rate environment and
as companies look to refinance near-term debt maturities
    ** CDMO shares have fallen 45% over the past year through
Weds close for market cap of ~$556 mln, per LSEG data

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))