DUBLIN, Ohio, Sept. 11, 2009 — Cardinal Health today announced the results of its early tender offer in connection with the offer to purchase up to an aggregate purchase price of $1.2 billion of its long-term debt securities.
The tender offer is part of a previously announced plan to reduce the company’s long-term debt after the completion of the planned spinoff of CareFusion Corp. and includes notes issued by both Cardinal Health and one of its wholly owned subsidiaries, Allegiance Corp. After the close of business on Aug. 31, Cardinal Health completed the spinoff of CareFusion and received a cash distribution from CareFusion of approximately $1.4 billion.
Early tender results
As of 5 p.m., New York City time, on Thursday, Sept. 10, 2009 (the “early tender time”), the principal amounts of notes included in the table below have been tendered and not validly withdrawn, as reported by the tender agent:
|Notes||CUSIP/ISIN Number||Issuer1||Principal Amount Outstanding(in millions)2||Acceptance Priority Level||Principal Amount Tendered as of Early Tender Time(in millions)3|
|7.80% Debentures due Oct. 15, 2016||017475AB0;
|6.75% Notes due Feb. 15, 2011||14149YAF5;
|6.00% Notes due June 15, 2017||14149YAQ1;
|7.00% Debentures due Oct. 15, 20263||017475AC8;
|5.85% Notes due Dec. 15, 2017||14149YAH1;
|5.80% Notes due Oct. 15, 2016||14149YAL2;
|5.65% Notes due June 15, 2012||14149YAP3;
|5.50% Notes due June 15, 2013||14149YAS7;
|4.00% Notes due June 15, 2015||14149YAG3;
(1)Cardinal Health is the issuer of each series of notes designated with a “C.” Allegiance Corp. (“Allegiance”) is the issuer of each series of notes designated with an “A.” Allegiance is a wholly owned subsidiary of Cardinal Health.
(2)Principal Amounts Outstanding for each series of notes do not include the principal amounts of any notes of such series that are owned by Cardinal Health, as such notes will not be tendered for purchase pursuant to the offer.
(3)Pursuant to the offer, Cardinal Health is only offering to purchase 7.00% Debentures due 2026 with an aggregate purchase price, excluding accrued interest, of up to $100,000,000.
Cardinal Health has accepted for purchase all notes with an acceptance priority level of one validly tendered and not validly withdrawn by the early tender time. Holders of these notes will receive (1) $1,105.00 per $1,000 principal amount of 7.80% debentures due Oct. 15, 2016, (2) $1,072.50 per $1,000 principal amount of 6.75% notes due Feb. 15, 2011 and (3) $1,062.50 per $1,000 principal amount of 6.00% notes due June 15, 2017 tendered. Cardinal Health will fund the purchase of the Allegiance Corporation notes accepted for purchase from cash on hand and will fund the purchase of the Cardinal Health notes accepted for purchase from the cash distribution from CareFusion. The settlement date for Cardinal Health notes accepted for purchase will be Sept. 11, and the settlement date for Allegiance Corporation notes accepted for purchase will be Sept. 14.
The tender offer
The tender offer will expire at 11:59 p.m., New York City time, on Sept. 24, unless extended or earlier terminated by Cardinal Health. The settlement date for notes with an acceptance priority level of one that are tendered and accepted after the early tender time, but prior to the expiration time, and for notes with an acceptance priority level of other than one that are tendered and accepted prior to the expiration time, will be promptly after the expiration time, and is expected to be on or about Sept. 25, for notes issued by Cardinal Health, and Sept. 28 for notes issued by Allegiance, unless the tender offer is extended. Tenders of notes submitted after the expiration time will be invalid and will not be accepted.
Notes with an acceptance priority level of other than one validly tendered and not validly withdrawn by the early tender time that are accepted for purchase by Cardinal Health will be eligible to receive the total consideration, which is the sum of the tender offer consideration and the early tender premium, each as described in the Offer to Purchase. Notes validly tendered and not validly withdrawn after the early tender time, but prior to the expiration time, that are accepted for purchase by Cardinal Health will be eligible to receive the tender offer consideration, but will not be eligible to receive the early tender premium.
The amount of each series of notes that is purchased in the tender offer will be based on the acceptance priority level. All notes of any series tendered in the offer that have a higher acceptance priority level will be accepted before any notes of any series with a lower acceptance priority level. Notes of the series in the lowest acceptance priority level accepted for purchase in the tender offer may be subject to proration. In addition, the aggregate purchase price of 7.00% debentures due 2026 that will be accepted for purchase in the tender offer will not exceed $100 million. If 7.00% debentures due 2026 are tendered such that the aggregate purchase price for the notes would exceed $100 million, they will be subject to proration. Any tendered notes that are not accepted for purchase will be returned without expense to the tendering holder.
In addition to receiving the applicable consideration, holders of notes validly tendered and accepted for purchase will receive accrued and unpaid interest on the notes from the last interest payment date for the notes up to, but not including, the applicable settlement date for the notes.
Cardinal Health may (i) extend or otherwise amend the expiration time or (ii) increase the tender cap or the maximum aggregate purchase price of 7.00% debentures due 2026 that Cardinal Health will accept for purchase, without extending the withdrawal deadline or otherwise reinstating withdrawal rights of holders. Tendered notes may not be withdrawn after the withdrawal deadline, except as required by law.
The tender offer is conditioned on the satisfaction of certain conditions, which are set forth in the Offer to Purchase. Notwithstanding any other provision of the tender offer, Cardinal Health will not be required to accept any notes for purchase, and may terminate, extend or amend the tender offer, and may postpone the acceptance of notes tendered to the offer if any of the conditions to the offer have not been satisfied or waived by Cardinal Health. Holders are urged to read the Offer to Purchase and the related Letter of Transmittal carefully before making any decision with respect to the offer.
The dealer managers for the offer are Barclays Capital Inc., RBS Securities Inc. and UBS Securities LLC. The co-dealer managers for the offer are Deutsche Bank Securities Inc. and Goldman, Sachs & Co. Cardinal Health has retained D.F. King & Co. Inc. to serve as the information agent and the tender agent for the offer.
Requests for documents and questions regarding the tendering of notes may be directed to D.F. King & Co. Inc. by telephone at 212.269.5550 for bankers and brokers and 800.431.9645 (toll free) for all others. Questions regarding the offer may be directed to Barclays Capital Inc. at 800.438.3242 (toll free) or 212.528.7581, RBS Securities Inc. at 877.297.9832 (toll free) or 203.897.6145 and UBS Securities LLC at 888.719.4210 (toll free) or 203.719.4210. The Offer to Purchase and related Letter of Transmittal were distributed to holders beginning August 27, 2009. Copies of the Offer to Purchase and the Letter of Transmittal related to the offer may also be obtained at no charge from the information agent.
This news release is neither an offer to purchase nor a solicitation of an offer to sell the notes or any other securities, and is qualified by reference to the Offer to Purchase. The offer is made only by and pursuant to the terms of the Offer to Purchase and the related Letter of Transmittal. Cardinal Health, the dealer managers, the information agent or the tender agent do not make any recommendation as to whether holders should tender their notes pursuant to the offer.
About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a Fortune 18 health care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals and ambulatory care sites focus on patient care while reducing costs, improving efficiency and quality, and increasing profitability. As one of the largest health care companies in the world, Cardinal Health is an essential link in the health care supply chain, providing pharmaceuticals and medical products to more than 40,000 locations each day. The company is also a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company supports the growing diagnostic industry by supplying medical products to clinical laboratories and operating the nation’s largest network of radiopharmacies that dispense products to aid in the early diagnosis and treatment of disease. Cardinal Health employs more than 30,000 people worldwide. More information about the company may be found at cardinalhealth.com.