Avery Dennison offers to exchange units

Adhesive maker Avery Dennison Corp. said Tuesday it will offer to exchange its HiMEDS units for shares of stock.

The company will exchange its 7.875 percent HiMEDS Units, worth about $440 million in total, for shares and other consideration.

The reduction in interest expense attributable to the units should partly offset the dilution in earnings per share that will occur when the stock related to the exchange is issued.

The units do not require holders to exchange them for stock until November, 2010, so the exchange in voluntary.

The announcement came as the Pasadena, Calif., company reported its fourth-quarter profit fell 46 percent, as Avery Dennison implemented a restructuring program to offset higher raw material costs and the weakening economic climate.

In morning trading, shares fell $3.31, or 12 percent, to $24.53. The day's low of $24.25 was a new 52-week low.