TETERBORO, N.J., May 24 /PRNewswire/ -- Quest Diagnostics Incorporated
(NYSE: DGX) announced today that it has commenced a cash tender offer for any
and all of its outstanding $150 million principal amount of 10-3/4% Senior
Subordinated Notes due 2006. The tender offer is part of the company's plan to
refinance a majority of its long-term debt in order to reduce its overall
interest costs. The company has received commitments, subject to certain
conditions, for $650 million of new, unsecured bank debt from a group of banks
led by Bank of America and UBS Warburg. Quest Diagnostics also intends to
issue long-term unsecured bonds. In connection with the refinancing plan, the
company expects to record a special charge of up to $45 million.
The new long-term financing is expected to close on or about the same day
that the tender offer is consummated. The tender offer is subject to a number
of conditions, including receipt of consents from a majority of the
outstanding noteholders to the proposed amendments to the indenture described
below, and completion of its refinancing plans on terms satisfactory to the
company. The tender offer is made upon the terms and conditions set forth in
the company's Offer to Purchase and Consent Solicitation Statement dated
May 24, 2001. The tender offer will expire at 5:00 p.m., New York City time
on June 27, 2001, unless extended or terminated by the company.
Under the terms of the offer, Quest Diagnostics will purchase its
outstanding notes at a price to be determined two business days prior to the
expiration date of the tender offer by reference to a fixed spread of 50 basis
points over the yield to maturity of U.S. Treasury 5-7/8% Notes due
November 30, 2001, plus accrued and unpaid interest. Included in this
purchase price is a consent payment equal to $30.00 per $1,000 principal
amount of the notes for those noteholders who are entitled to such payment.
In connection with the tender offer, Quest Diagnostics is also seeking
consents from the noteholders to certain proposed amendments to the indenture
governing the notes. The purpose of the proposed amendments is to eliminate
substantially all of the restrictive provisions of the indenture. Subject to
certain conditions, only noteholders who consent to the proposed amendments by
validly tendering their notes prior to the end of the consent period
(5:00 p.m. New York City time on June 7, 2001, unless extended) will receive
the consent payment. Tendered notes may not be withdrawn and consents may not
be revoked after the end of the consent period. Payment for validly tendered
notes is expected to be made on the first business day promptly following the
expiration of the tender offer.
Merrill Lynch & Co. will act as Dealer Manager for the tender offer and
consent solicitation. The Information Agent is Georgeson Shareholder and the
Depositary is The Bank of New York. Persons with questions regarding the
tender offer and consent solicitation should contact Merrill Lynch & Co.,
Liability Management Group, at either 212-449-4914 or toll-free at
888-ML4-TNDR. For additional documents, please call Georgeson Shareholder
either at 212-440-9800 or toll-free at 800-223-2064.
Quest Diagnostics is the nation's leading provider of diagnostic testing,
information and services with annual revenues of $3.4 billion in 2000. The
company's diagnostic testing yields information that enables health care
professionals and consumers to make better decisions to improve health. Quest
Diagnostics offers patients and physicians the broadest access to diagnostic
testing services through its national network of approximately 30 full-service
laboratories, 150 rapid response laboratories and more than 1,300 patient
service centers, where specimens are collected. Quest Diagnostics is the
leading provider of esoteric testing, including gene-based testing, and is the
leader in routine medical testing, drugs of abuse testing, and anatomic
pathology testing. Through partnerships with pharmaceutical, biotechnology
and information technology companies, Quest Diagnostics provides support to
help speed the development of health care insights and new therapeutics.
Additional Company information can be found on the Internet at:
http://www.questdiagnostics.com.
The statements in this press release which are not historical facts or
information may be forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause the outcome to be
materially different. Certain of these risks and uncertainties are described
in the Quest Diagnostics Incorporated 2000 Form 10-K and subsequent filings.
SOURCE Quest Diagnostics Incorporated
CONTACT: Investors - Cathy Doherty, 201-393-5030, or Media - Gary
Samuels, 201-393-5700, both for Quest Diagnostics Incorporated/