Filed by Cardinal Health, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Syncor International Inc.
Commission File No. 000-08640
To: All Cardinal Health Employees
From: Bob Walter
Re: Developments at Syncor
I'm writing to update you on some recent developments with regard to our
previously-announced acquisition of Syncor. As part of our ongoing due diligence
review, we uncovered certain improper payments that Syncor has made in foreign
countries. We reported our findings immediately to Syncor, whose Board of
Directors contacted the proper government officials. I thought you might
like to see the two news releases that were distributed about this issue early
this morning, which are attached - one from Syncor and one from Cardinal Health.
While it is difficult to know yet what effect this development may have on our
plans to acquire Syncor, there are a few things I want to make clear:
* While I am very disappointed with this development, it is an important
example of how thoroughly we review the business operations, financial
practices and other aspects of any new businesses we seek to acquire. And,
frankly, ethics and cultural values are just as important to us as
operational or financial issues. It's the reason we take our time with due
diligence - we want to make sure we know everything we can about any business
we want to make part of Cardinal Health.
* We are continuing to monitor this situation carefully. Our agreement with
Syncor is subject to a number of conditions that need to be satisfied before
we close. At this time, we haven't concluded whether those conditions will be
satisfied.
* Our CPSI nuclear pharmacy business has been -- and continues to be -- an
important part of our business strategy. The reason we want to further invest
in this business is because we believe we can create better value for
customers by expanding our core set of products and services. We remain
committed to this business strategy.
Growth is an important part of our strategy at Cardinal Health. But, I can
assure that any acquisitions made in support of that growth must meet our
criteria for integrity and ethics.
This is a very complex situation and it is not a good idea to speculate on the
ultimate outcome. This issue should not be discussed with customers, suppliers
or others outside of Cardinal Health. We'll keep you posted on any new
developments as they occur.
*********************
Except for historical information, all other information in this news release
consists of forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected, anticipated or implied. The most significant
of these uncertainties are described in Cardinal Health's Form 10-K, Form
8-K and Form 10-Q reports and exhibits to those reports, and include (but are
not limited to) the costs, difficulties, and uncertainties related to the
integration of acquired businesses, the loss of one or more key customer or
supplier relationships, changes in the distribution outsourcing patterns for
health-care products and/or services, the costs and other effects of
governmental regulation and legal and administrative proceedings, and general
economic conditions. Cardinal undertakes no obligation to update or revise any
forward-looking statements.
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of stockholders of Syncor
International Corporation ("Syncor") in connection with the proposed
merger, and their interests in the solicitation, is set forth in the definitive
proxy statement/prospectus dated October 16, 2002 mailed by Syncor to Syncor
shareholders on October 17, 2002 and filed with the SEC. Cardinal Health, Inc.
("Cardinal Health") has filed a registration statement on Form S-4 in
connection with the transaction. Investors and security holders of Syncor are
urged to read the definitive proxy statement/prospectus because it contains
important information about Cardinal Health, Syncor and the transaction.
Investors and security holders may obtain a free copy of the proxy
statement/prospectus at the SEC's web sit at www.sec.gov. A free copy of the
proxy statement/prospectus may also be obtained from Cardinal or Syncor.
Cardinal and Syncor and their respective executive officers and directors may be
deemed to be participants in the solicitation of proxies from the stockholders
of Syncor in favor of the transaction. In addition to the registration
statement on Form S-4 filed by Cardinal Health in connection with the
transaction, and the proxy statement/prospectus mailed to the stockholders of
Syncor in connection with the transaction, each of Cardinal and Syncor file
annual, quarterly and special reports, proxy and information statements, and
other information with the SEC. Investors may read and copy any of these
reports, statements and other information at the SEC's public reference room
located at 450 5th Street, N.W., Washington, D.C., 20549. Investors should call
the SEC at 1-800-SEC-0330 for further information. The reports, statements and
other information filed by Cardinal Health and Syncor with the SEC are also
available for free at the SEC's web site at www.sec.gov. A free copy of these
reports, statements and other information may also be obtained from Cardinal or
Syncor. Investors should read the proxy statement/prospectus carefully before
making any voting or investment decision.
[Cardinal Health Logo]
7000 CARDINAL PLACE
DUBLIN, OH 43017
WWW.CARDINAL.COM
NEWS RELEASE
FOR IMMEDIATE RELEASE
Media Contact: David Verbraska
614-757-3690
Investor Contact: Stephen Fischbach
614-757-7067
CARDINAL HEALTH RESPONDS TO SYNCOR ANNOUNCEMENT
-------------------------------------------------
IMPROPER PAYMENTS BY SYNCOR IDENTIFIED THROUGH ONGOING DUE DILIGENCE
INTENDS TO CAREFULLY MONITOR THE SITUATION
DUBLIN, OHIO, NOVEMBER 6, 2002 -- Cardinal Health, Inc. (NYSE: CAH), confirmed
today that during its ongoing due diligence investigation of Syncor
International Corporation, the proposed acquisition of which was announced on
June 14, 2002, Cardinal Health recently discovered certain improper payments
that had been made in foreign countries by subsidiaries of Syncor. As soon as it
made these discoveries, Cardinal Health promptly informed Syncor of its findings
and Syncor immediately initiated an investigation.
Cardinal Health has since been informed of the results to date of the
investigation undertaken by a special committee formed by the Board of Directors
of Syncor to review these improper payments. Cardinal Health supports the
actions taken today by the Syncor Board in response to the results of the
special committee's ongoing investigation as well as the proactive decision by
Syncor to make full disclosure of its findings to the Department of Justice and
the Securities and Exchange Commission. Cardinal Health will continue to
carefully monitor the Syncor situation and assess the results of the Syncor
special committee's ongoing investigation as well as the results of Cardinal
Health's continuing due diligence review. Cardinal Health intends to use all
appropriate resources and spend the time necessary to complete its ongoing
comprehensive due diligence review in a deliberate manner.
Robert D. Walter, chairman and chief executive officer of Cardinal Health
stated: "Cardinal Health has an outstanding reputation for integrity in
operating our domestic and international businesses in an ethical and honest
manner. This reputation extends to our employees, suppliers and customers as
well as to the government agencies that come in contact with our businesses and
operations. We are committed to adhering to the principle of operating our
businesses consistent with all applicable legal obligations. While we continue
to believe that the strategic rationale for the acquisition of Syncor and its
nuclear pharmacy business has validity, any decision with respect to this
transaction must be made in the context of adhering to our core values and
protecting Cardinal Health's reputation."
-more-
CARDINAL HEALTH RESPONDS TO SYNCOR ANNOUNCEMENT
PAGE 2
Cardinal Health notes that the acquisition of Syncor by Cardinal Health is
subject to the satisfaction or waiver of a number of conditions set forth in the
merger agreement, dated June 14, 2002, between Syncor and Cardinal Health. At
this time, Cardinal Health has not yet concluded whether those conditions will
be satisfied. Cardinal Health intends to fully comply with its obligations under
the merger agreement. There can be no assurance that the transaction involving
the acquisition of Syncor by Cardinal Health will be completed.
ABOUT CARDINAL HEALTH
---------------------
Cardinal Health, Inc. (WWW.CARDINAL.COM ) is the leading provider of products
and services supporting the health care industry. Cardinal Health companies
develop, manufacture, package and market products for patient care; develop
drug-delivery technologies; distribute pharmaceuticals, medical-surgical and
laboratory supplies; and offer consulting and other services that improve
quality and efficiency in health care. Headquartered in Dublin, Ohio, the
company employs approximately 50,000 people on five continents, with more than
40 percent of its employees in operations outside the United States, and
produces annual revenues of more than $44 billion. Cardinal Health is ranked #23
on the current Fortune 500 list and was named one of "The World's Best"
companies by Forbes magazine in 2002.
Except for historical information, all other information in this news release
consists of forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected, anticipated or implied. The most significant
of these uncertainties are described in Cardinal Health's Form 10-K, Form
8-K and Form 10-Q reports and exhibits to those reports, and include (but are
not limited to) the costs, difficulties, and uncertainties related to the
integration of acquired businesses, the loss of one or more key customer or
supplier relationships, changes in the distribution outsourcing patterns for
health-care products and/or services, the costs and other effects of
governmental regulation and legal and administrative proceedings, and general
economic conditions. Cardinal undertakes no obligation to update or revise any
forward-looking statements.
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of stockholders of Syncor
International Corporation ("Syncor") in connection with the proposed
merger, and their interests in the solicitation, is set forth in the definitive
proxy statement/prospectus dated October 16, 2002 mailed by Syncor to Syncor
shareholders on October 17, 2002 and filed with the SEC. Cardinal Health, Inc.
("Cardinal Health") has filed a registration statement on Form S-4 in
connection with the transaction. Investors and security holders of Syncor are
urged to read the definitive proxy statement/prospectus because it contains
important information about Cardinal Health, Syncor and the transaction.
Investors and security holders may obtain a free copy of the proxy
statement/prospectus at the SEC's web sit at www.sec.gov. A free copy of the
proxy statement/prospectus may also be obtained from Cardinal or Syncor.
Cardinal and Syncor and their respective executive officers and directors may be
deemed to be participants in the solicitation of proxies from the stockholders
of Syncor in favor of the transaction. In addition to the registration
statement on Form S-4 filed by Cardinal Health in connection with the
transaction, and the proxy statement/prospectus mailed to the stockholders of
Syncor in connection with the transaction, each of Cardinal and Syncor file
annual, quarterly and special reports, proxy and information statements, and
other information with the SEC. Investors may read and copy any of these
reports, statements and other information at the SEC's public reference room
located at 450 5th Street, N.W., Washington, D.C., 20549. Investors should call
the SEC at 1-800-SEC-0330 for further information. The reports, statements and
other information filed by Cardinal Health and Syncor with the SEC are also
available for free at the SEC's web site at www.sec.gov. A free copy of these
reports, statements and other information may also be obtained from Cardinal or
Syncor. Investors should read the proxy statement/prospectus carefully before
making any voting or investment decision.
[SYNCOR LOGO]
NASDAQ: SCOR
FOR RELEASE ON WEDNESDAY, NOVEMBER 6, 2002
7:00 AM EASTERN STANDARD TIME
Contact:
Allan Mayer
Sitrick And Company
(310) 788-2850
SYNCOR ANNOUNCES INTERNAL INVESTIGATION
REGARDING PAYMENTS IN OVERSEAS OPERATIONS
WOODLAND HILLS, CALIFORNIA, NOVEMBER 6, 2002 - Syncor International Corporation
(Nasdaq: SCOR) announced that a committee of outside directors, together with
special outside counsel, has been investigating the propriety of certain
payments made by overseas subsidiaries to customers in several foreign
countries, including Taiwan and China. To date, the investigation indicates that
some of the payments made to state-owned and private healthcare facilities may
have violated foreign and U.S. law, including the Foreign Corrupt Practices Act.
The investigation will cover Syncor's other overseas operations as well.
Representatives of Syncor have met with the Securities and Exchange Commission
and the U.S. Department of Justice to discuss the matter. Syncor intends to
cooperate fully with the authorities.
The Company also said that Mr. Monty Fu, Chairman of Syncor, and his brother,
Mr. Moses Fu, Director, Asia Region - Syncor Overseas LTD., have gone on paid
leave pending completion of an investigation into their involvement in the
payments. Monty Fu has also agreed to suspend his participation as a company
director pending completion of the investigation. The Board of Directors has
elected Mr. Bernard Puckett, a current director and Chair of the special
committee investigating the payments, as lead director of the Board.
The Company said that it takes full responsibility for the questionable payments
and is determined to uncover and correct any ethical or legal breaches that may
have been committed by any of its employees. The Company further emphasized that
it does not tolerate unethical or illegal behavior of any kind by any employee,
and that any employee found to have been responsible for any misdeeds will be
held fully accountable for his or her actions.
The payments were brought to Syncor's attention by Cardinal Health, Inc.
(NYSE:CAH), which learned of them in the course of its ongoing post-signing due
diligence relating to the previously announced planned merger of the two
companies. Syncor is working closely with Cardinal Health regarding the matter.
Syncor International Corporation
Syncor Announces Internal Investigations Regarding Payments in Overseas
Operations
November 6, 2002
Page 2
The Company announced that in order to provide additional time to complete the
investigation of its overseas operations and make any appropriate disclosures to
stockholders, it has postponed until Friday, December 6, 2002, its special
meeting of stockholders to vote on the pending merger with Cardinal Health. The
meeting had originally been scheduled for November 19th. The exact time and
place of the special meeting will be included in an amended notice of meeting
and supplemental proxy materials that will be mailed to stockholders as soon as
they are available.
A determination as to the final impact of these payments on the Company, as well
as what legal and disciplinary action might be appropriate, is subject to
completion of the investigation.
Mr. Puckett, Syncor's new lead director, is Chairman of the Board of
Openwave Systems Inc. He was formerly President and Chief Executive Officer
of Mobile Telecommunication Technologies Corporation. Mr. Puckett also held
a variety of positions in a 27-year career at IBM Corp., including Senior Vice
President of Corporate Strategy and Development and Vice President and General
Manager, Applications Software.
ABOUT SYNCOR
SYNCOR INTERNATIONAL CORPORATION is a leading provider of high
technology health care services concentrating on nuclear pharmacy services,
medical imaging, niche manufacturing and radiotherapy. In the nuclear pharmacy
services business, Syncor compounds and dispenses radiopharmaceuticals for
diagnostic and therapeutic use by nuclear medicine departments in hospitals and
outpatient clinics. Syncor distributes these time-critical pharmaceuticals to
more than 7,000 U.S.-based customers through an integrated network of 130
domestic and 19 international nuclear pharmacies. Medical imaging services are
provided through an integrated network of 73 domestic and 19 internationally
owned or operated facilities. Syncor announced on June 14, 2002 that it intends
to exit the U.S. medical imaging business. Syncor also owns or operates ten
domestic and two international production facilities for positron emission
tomography (PET) radiopharmaceuticals, and is a party to a series of agreements
to make PET technology more accessible to healthcare providers and patients
nationwide. For more information visit www.syncor.com.
--------------
Except for historical information, all other information in this news
release consists of forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected, anticipated or implied.
The most significant of these uncertainties are described in Syncor's Form
10-K, Form 8-K and Form 10-Q reports (including all amendments to those
reports) and exhibits to those reports, and include (but are not limited to)
the costs, difficulties, and uncertainties related to the integration of
acquired businesses, the loss of one or more key customer or supplier
relationships, changes in the distribution patterns or reimbursement rates
for health-care products and/or services, the costs and other effects
of governmental regulation and legal and administrative proceedings, and
general economic and market conditions. Syncor undertakes no obligation to
update or revise any forward-looking statements.
Information regarding the identity of the persons who may, under SEC rules, be
deemed to be participants in the solicitation of stockholders of Syncor in
connection with the proposed merger, and their interests in the
solicitation, is set forth in a Schedule 14A filed on June 14, 2002 with the
SEC. Cardinal Health has filed a registration statement on Form S-4 in
connection with the transaction, and Syncor is mailing a definitive proxy
statement/prospectus to its stockholders in connection with the transaction.
Investors and security holders of Syncor are urged to read the definitive
proxy statement/prospectus because it contains important information about
Cardinal Health, Syncor and the transaction. A free copy of the definitive
proxy statement/prospectus may be obtained from Cardinal Health or Syncor
or at the SEC's Web site at www.sec.gov. Information regarding the interests
of Syncor's officers and directors in the transaction is included in
the definitive proxy statement/prospectus. In addition to the
registration statement on Form S-4 filed by Cardinal Health in
connection with the transaction, and the definitive proxy
statement/prospectus mailed to the stockholders of Syncor in connection with
the transaction, each of Cardinal Health and Syncor file annual, quarterly
and special reports, proxy and information statements, and other information
with the SEC. Investors may read and copy any of these reports, statements and
other information at the SEC's public reference room located at 450 5th
Street, N.W., Washington, D.C., 20549. Investors should call the SEC at
1-800/SEC-0330 for further information. The reports, statements and other
information filed by Cardinal Health and Syncor with the SEC are also available
for free at the SEC's Web site at www.sec.gov. A free copy of these reports,
statements and other information may also be obtained from Cardinal Health or
Syncor. The proxy statement/prospectus contains important information that
should be read carefully by investors before making any voting or investment
decision.
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