A report early Wednesday has adidas-Salomon gearing up for the fight for the Top-Flite. Reuters is reporting that adidas-Salomon made its debut in the bond market on Wednesday, issuing 400 million euros ($434 million) worth of debt convertible to around four million of its shares.
The report said that investors welcomed details on the long-feared move, which would allow the company to benefit from low interest rates. “There's some relief that the size of the bond is finally known and the timing couldn't be better,” said Andreas Gartner, a fund manager at SEB in Frankfurt.
The report said that adidas had indicated that the bond issue would help improve its debt situation and financing terms and the cash would “help line its pockets ahead of an auction” for Top-Flite Golf Company.
“Part of the proceeds could be used for this acquisition,” a company spokeswoman told Reuters, while declining to say how far Adidas would be prepared to increase its $126 million dollar bid for the golf ball maker.
adidas said the bond would be offered only to institutional investors outside the U.S., Canada and Japan and could not be called until October 2009, with trading commencing in October 2003 on the Frankfurt stock exchange.
adidas has almost three times as much debt as equity. It has a mid-term plan to reduce its debt pile by at least 100 million euros per year.
