Cardinal Health says Alaris gets required consents - 94% - in tender for 7¼% notes

New York, July 21- Cardinal Health Inc. said its Alaris Medical Systems Inc. subsidiary had received sufficient consents to proposed indenture changes from the holders of Alaris' 7¼% senior subordinated notes due 2011 as part of the latter company's previously announced tender offer for the notes and related consent solicitation.

Cardinal said that the offer's consent deadline expired as scheduled at midnight ET on July 20, without extension. As of that deadline, the company had received valid tenders and consents from holders of $164.425 million of the notes, or about 94% of the outstanding principal amount of the notes, thus satisfying the tender offer's consent condition.

Cardinal said that notes tendered by the consent deadline may now no longer be withdrawn and the related consents may not be revoked, except in limited circumstances described in the official offer to purchase documents.

Accordingly, Alaris and the notes' indenture trustee intend to promptly execute and deliver a supplemental indenture containing the proposed amendments, which would eliminate substantially all restrictive covenants and certain event of default provisions. However, the amendments will not become operative until Alaris accepts the notes for purchase. If the proposed amendments do become operative, holders of all the notes then outstanding will be bound by the amendments.

The tender offer meanwhile continues and is scheduled to expire on Aug. 3, subject to possible extension.

As previously announced, Cardinal Health, a Dublin, Ohio-based provider of products and services to the health care industry, said on July 7 that its recently acquired Alaris Medical Systems subsidiary had started a tender offer and consent solicitation for any and all of its $175 million principal amount of 7¼% notes.

It set a consent deadline of July 20 and said the tender would end at midnight ET on Aug. 3, subject to possible extension.

Cardinal said that the tender price would be determined using a formula and would reflect that Alaris has the right to exercise the equity claw for 35% of the notes.

It said that for each $1,000 principal amount of notes, holders tendering by the consent deadline will receive the sum of 35% of the equity clawback price and 65% of the fixed spread price. The equity clawback price is $1,072.50 per $1,000 principal amount. The fixed spread price will be the present value on Aug. 3 of all future cash flows on the notes to the first call date of July 1, 2007.

Holders tendering after the consent deadline but before the expiry will receive the same amount, but will not receive the extra $30 per $1,000 principal amount consent payment as part of their consideration. Alaris will also pay all tendering holders accrued interest up to but excluding the payment date.

Holders tendering by the consent deadline will be deemed to have given consents. Consents may not be given without tendering.

Cardinal Health said the offer is subject to, among other things, the receipt of the necessary consents.

On July 20, Cardinal said that Alaris had established the pricing for its tender offer, using a reference yield, according to a previously announced formula.

Assuming a payment date of Aug. 4, the total consideration for each $1,000 principal amount of notes tendered and accepted for payment under the terms of the tender offer will be $1,116.18, plus accrued interest up to but not including the payment date. Holders tendering after the consent deadline will not receive the consent payment that will be paid to holders tendering by the deadline (in addition to the basic tender consideration set on July 20).

Questions may be directed to MacKenzie Partners Inc. (800 322-2885, banks and brokers call collect 212 929-5500).

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