Priceline.com (NASDAQ:BKNG) is preparing to launch a pair of new capital initiatives. The first is the flotation of up to $1 billion in convertible notes that mature in 2020 and will be convertible into cash, stock, or a combination of the two. The interest rate and other features of the securities will be negotiated between priceline.com and the offering's initial purchaser. In addition, if certain circumstances are met, the company intends to grant that initial purchaser a 30-day option to buy up to an additional $150 million in principal value of the notes, to cover overallotments.
The monies will help fund an expansion of priceline.com's common stock repurchase program, which has been widened by $1 billion. The company says it will use the proceeds of the convertible notes to buy back an initial $450 million worth of its shares in "privately negotiated, off-market transactions." Following that, repurchases may be effected via open market buys or other private deals.
Fool contributor Eric Volkman has no position in priceline.com. The Motley Fool recommends and owns shares of priceline.com. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.