March 29, 2006
Strong interest of capital market for subordinated mandatory convertible bond
successfully placed EUR a 2 billion bond, mandatorily convertible into shares of
Bayer AG, with institutional investors.
The bond is subordinated and enjoys a subordinated guarantee from Bayer AG. The
bond will mandatorily convert into new shares, created from the existing conditional
capital of Bayer AG, at maturity in June 2009. The mandatory convertible bond will
be issued without pre-emptive rights for existing shareholders.
The main terms of the mandatory convertible bond include a 6.625% coupon, a
minimum conversion price of EUR 33.03 and a conversion premium of 17%, resulting
in a maximum conversion price of EUR 38.64.
The minimum conversion price equals the volume weighted average price of Bayer
AG shares from start of trading until pricing of the transaction today. Bayer AG will
benefit from an increasing share price up to the maximum conversion price as a lower
number of shares will have to be issued on conversion.
The net proceeds will be used among others as part of the financing of the intended
acquisition of Schering AG and is part of the previously announced equity capital
raising measures of up to EUR 4 billion.