Pacira Viatris Deal Pays Convertible Holders Above Par

Viatris agreed on Thursday, October 8, 2026, to buy Pacira BioSciences for $36.50 a share in cash, an equity value of $1.65 billion, according to the companies' joint press release. The price sits below the $39.56 conversion price on Pacira's $287.5 million of 2029 convertible notes, yet a make-whole table in the notes' 2024 indenture should still lift them above par. By TradeFlock calculations, holders who convert around a year-end closing would receive about $1,102 per $1,000 note, or roughly $29 million more than par in total.

The Pacira Acquisition Terms

Pacira's October 8 8-K filing says a Viatris subsidiary, Peach Purchaser Sub, will launch a cash tender offer within 15 business days of signing. It needs one share more than 50% of Pacira's stock tendered and the end of the Hart-Scott-Rodino waiting period. Pacira would owe a $62.0 million termination fee if it walks away for a superior offer.

Viatris's own October 8 8-K sets the outside date at Thursday, April 8, 2027, with one automatic extension to Thursday, July 8, 2027 if only antitrust or legal restraint conditions remain. The companies expect to close by the end of 2026.

Why the Notes Clear Par

Pacira sold the 2.125% notes due May 15, 2029 in May 2024. The indenture sets a base conversion rate of 25.2752 shares per $1,000 of notes. At $36.50, that is worth only about $923, a TradeFlock calculation, so plain conversion would lose to the par repurchase right the notes carry on a fundamental change.

A cash merger is such a fundamental change under the indenture, and it also counts as a make-whole event. Section 13.03 says that when holders receive only cash, the stock price for the table "shall be the cash amount paid per share."

Straight-line interpolation between the table's $35.00 and $39.56 columns and its May 2026 and May 2027 rows, which the indenture prescribes, gives about 4.91 extra shares for a December 31, 2026 closing at $36.50.

Measure (per $1,000 note)	Value
Base conversion rate	25.2752 shares
Base conversion value at $36.50 (TradeFlock calculation)	about $923
Make-whole extra shares, Dec 31, 2026 closing (TradeFlock calculation)	about 4.91
Conversion value with make-whole (TradeFlock calculation)	about $1,102
Fundamental change repurchase price	$1,000 plus accrued interest

Across $287.5 million of notes, that is about $317 million of conversion value, roughly $29 million above par, a TradeFlock calculation. The figure depends on the closing date because the table steps down over time. By the same interpolation, a close on the April 8, 2027 outside date would pay about $1,098 per note, or $28 million above par, and a close on the extended July 8, 2027 date about $1,092, or $26 million above par, TradeFlock calculates. The merger agreement confirms the notes are still outstanding: it lists 9,628,260 shares reserved for conversion, which matches the indenture's cap of 33.4896 shares per $1,000 note.

The Capped Call Hedge Is an Open Question

Pacira bought capped calls in 2024 to offset dilution from conversions. Its May 2024 8-K filing says they cover the shares underlying the notes and are meant to offset payments above principal on conversion, subject to a cap of about $53.75 a share. The filings we reviewed do not state the strike in that summary. Section 7.14 of the merger agreement asks Pacira to help Viatris settle or terminate them at closing, on terms not disclosed, so how much of the make-whole cost they recover is unknown. Capped calls are usually struck at the conversion price, and $36.50 is below the $39.56 conversion price, so the hedge may recover little, but Pacira has not disclosed the unwind terms.

What Viatris Is Paying For

The $36.50 price is 44.8% above Pacira's Wednesday, October 7 close of $25.20, the last close before the deal, a TradeFlock calculation. We treat that date as undisturbed because Pacira closed between $24.08 and $26.60 from September 1 through October 7, with no run-up, according to Yahoo Finance closing prices. Its highest close in the prior year was $27.62 on August 4, so the offer also tops that by 32%, by TradeFlock calculation. Pacira closed at $36.31 on Friday, October 9, a spread of $0.19, or 0.5%.

The release says Pacira earned about $746 million of revenue and $177 million of adjusted EBITDA in the 12 months to June 30. Pacira's second quarter 10-Q filing showed $205.9 million of cash, $45.2 million of short-term investments and $81.0 million drawn on its revolver. Adding the notes at par gives an enterprise value of about $1.77 billion, or 10.0 times adjusted EBITDA and 2.4 times revenue, all TradeFlock calculations using June 30 balances. Full-year 2026 revenue guidance, cut after the iovera sale, is $735 million to $760 million, per Pacira's August 4 earnings release.

The notes are not the only fine print. The same 10-Q says a 2025 patent settlement lets Fresenius Kabi and its partners sell volume-limited generic EXPAREL from early 2030, with unlimited entry from 2039, while suits against WhiteOak and Qilu continue. As with the Option Care Health buyout, the contract terms say as much about who carries risk as the headline price. And as the Ultragenyx voucher sale showed, a single regulatory asset can fetch $210 million on its own.

Cover photo: An empty, lit hospital corridor, by Fabio Sasso on Unsplash, used under the Unsplash License.