SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 7
SYSTEMIX, INC.
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(Name of Issuer)
Common Stock, Par Value $.01 Per Share
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(Title of Class of Securities)
871872 10 7
(CUSIP Number of Class of Securities)
Robert L. Thompson, Jr.
Vice President and General Counsel
Sandoz Corporation
608 Fifth Avenue
New York, New York 10020
Telephone: (212) 830-2413
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(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications)
Copy to:
David W. Heleniak, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(212) 848-4000
May 23, 1996
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(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13-d-1(b)(3) or (4), check the following box. |_|
Check the following box if a fee is being paid with this statement. |_|
Page 1 of 20 Pages
<PAGE>
CUSIP No. 871872 10 7
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SANDOZ BIOTECH HOLDINGS CORPORATION
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(2) Check the Appropriate Box if a member of a Group
(a) |_|
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(b) |X|
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(3) SEC Use Only
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(4) Source of Funds AF
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(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d) or 2(e). |_|
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(6) Citizenship or Place of Organization Delaware
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- ---------------
(7) Sole Voting Power
Number of ---------------------------------
Shares
Beneficially (8) Shared Voting Power 11,977,699
Owned by -------------------------------
Each
Reporting (9) Sole Dispositive Power
Person ----------------------------
With
(10) Shared Dispositive Power 11,977,699
- --------------- -------------------------
(11) Aggregate Amount Beneficially Owned by Each
Reporting Person 11,977,699
----------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares |_|
(13) Percent of Class Represented by Amount in Row (11)
76%
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(14) Type of Reporting Person CO
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Page 2 of 20 Pages
<PAGE>
CUSIP No. 871872 10 7
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SANDOZ LTD.
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(2) Check the Appropriate Box if a member of a Group
(a) |_|
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(b) |X|
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(3) SEC Use Only
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(4) Source of Funds WC
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(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d) or 2(e). |_|
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(6) Citizenship or Place of Organization Switzerland
-----------------------------------
- ---------------
(7) Sole Voting Power
Number of ---------------------------------
Shares
Beneficially (8) Shared Voting Power 11,977,699
Owned by -------------------------------
Each
Reporting (9) Sole Dispositive Power
Person ----------------------------
With
(10) Shared Dispositive Power 11,977,699
- --------------- -------------------------
(11) Aggregate Amount Beneficially Owned by Each
Reporting Person 11,977,699
----------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares |_|
------
(13) Percent of Class Represented by Amount in Row (11)
76%
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(14) Type of Reporting Person CO
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Page 3 of 20 Pages
<PAGE>
This Amendment No. 7 amends, supplements and restates the Statement on
Schedule 13D, filed with the Securities and Exchange Commission on December 20,
1991, as amended by Amendment Nos. 1 through 6 thereto (the "Schedule 13D"), by
Sandoz Biotech Holdings Corporation, a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of Sandoz Ltd., a company organized under the
laws of Switzerland ("Parent"), with respect to the shares of common stock, par
value $.01 per share (the "Common Stock"), of SyStemix, Inc., a Delaware
corporation (the "Company").
This Amendment is made principally to amend Item 4 to report the
delivery of a letter by Parent to the Board of Directors of the Company on May
23, 1996 in which Parent offered to acquire all the issued and outstanding
shares of Common Stock not currently owned by Purchaser for $17.00 per share in
cash. Except for certain additional conforming changes, all other items
identified below are restated from the Schedule 13D in compliance with the
electronic filing requirements of the Securities and Exchange Commission as set
forth in Regulation S-T (Reg.ss. 232.101(a)(2)).
Item 1. Security and Issuer
Item 1 of the Schedule 13D is hereby amended, supplemented and restated
as follows:
(a) The name of the issuer is SyStemix, Inc., a Delaware corporation,
which has its principal executive offices at 3155 Porter Drive, Palo Alto,
California 94304.
(b) The exact title of the class of equity securities to which this
Schedule 13D relates is Common Stock, par value $.01 per share, of the Company.
Item 2. Identity and Background
Item 2 of the Schedule 13D is hereby amended, supplemented and restated
as follows:
(a)-(c) and (f) Purchaser is a Delaware corporation and has not carried
on any activities other than in connection with the purchase of securities of
the Company. The principal offices of Purchaser are located at 608 Fifth Avenue,
New York, New York 10020. Purchaser is an indirect wholly owned subsidiary of
Parent.
Parent is a corporation organized under the laws of Switzerland. Its
principal offices are located at Lichtstrasse 35, CH-4002 Basle, Switzerland.
The principal business of Parent is the research, development, manufacture and
marketing of pharmaceutical, agro, seed and nutrition products. On March 7,
1996, Parent and Ciba-Geigy Ltd. announced that, subject to certain conditions,
they would merge and form a new company named Novartis.
The name, citizenship, business address, principal occupation or
employment for each of the directors and executive officers of Purchaser and
Parent and certain other information are set forth below.
Page 4 of 20 Pages
<PAGE>
Directors and Executive Officers of Parent. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment for each director and executive officer of Parent.
Unless otherwise indicated, the current business address of each person is
Lichtstrasse 35, CH-4002 Basle, Switzerland. Unless otherwise indicated, each
such person is a citizen of Switzerland. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with
Parent.
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation
and Current Business Address or Employment
---------------------------- -------------
Board of Directors
<S> <C>
Dr. Marc Moret.............................................Chairman.
Hans-Joerg Rudloff.........................................Vice-Chairman; Owner, Marcuard & Company
(Citizen of Germany) (MC European Capital Holding SA).
c/o MC Securities Geneve SA
84, Rue du Rhone
CH-1200 Geneva
Switzerland
Prof. Dr. Duilio Arigoni...................................Director; Professor at Swiss Federal Institute of
Organic Chemistry Laboratory Technology.
Swiss Federal Institute of Technology
Universitatstrasse 16
CH-8092 Zurich
Switzerland
Fred-Henri Firmenich.......................................Director; Chairman, Firmenich International.
Firmenich S.A.
Chemin Bergere
Meyrin
CH-1217 Geneva
Switzerland
Robert Louis Genillard.....................................Director; Retired.
1, Quai du Mont-Blanc
CH-1211 Geneva
Switzerland
Page 5 of 20 Pages
<PAGE>
Pierre Landolt.............................................Director; Executive Director, Moco Agropecuaria
Fazenda Tamandua LTDA, Santa Terezinha, Paraiba, Brazil.
Santa Terezinha-Paraiba
PB 58772
Brazil
Dr. Lili Nabholz-Haidegger.................................Director; Member of Swiss Federal Parliament,
Eidmattstrasse 29 Berne, Switzerland.
CH-8032 Zurich
Switzerland
Tony R. Reis...............................................Director; Vice-President of IBM Europe.
Vice President, Europe
IBM Europe, Tour Pascal
La Defense F. Suj., Cedex 40
92075 Paris La Defense
France
Heinz Schoffler............................................Director; Chairman and Chief Executive Officer,
Ryf 6 Leofarin AG, Murten, Switzerland.
CH-3280 Murten
Switzerland
Daniel C. Wagniere.........................................Director; Head of Sandoz Technology Ltd.
Dr. Jean Wander............................................Director; Tax and Legal Advisor.
Bollwerk 21
CH-3000 Berne
Switzerland
Dr. Urich Oppikofer........................................Secretary.
Group Management
Alexandre F. Jetzer........................................President.
Dr. Raymund Breu...........................................Chief Financial Officer.
Dr. Paul J. Choffat........................................Head of Management Resources, Planning and
Organization.
Page 6 of 20 Pages
<PAGE>
Heinz Imhof................................................Head of Agribusiness/MBT Division.
David E. Pyott.............................................Head of Nutrition Division.
(Citizen of the United Kingdom)
Dr. Daniel L. Vasella......................................Head of Pharmaceuticals Division.
Daniel C. Wagniere.........................................Head of Technology.
Dr. Max Kaufman............................................Secretary.
Directors and Executive Officers of Purchaser. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment for each director and executive officer of Purchaser.
Unless otherwise indicated, the current business address of each person is 608
Fifth Avenue, New York, New York 10020. Unless otherwise indicated, each such
person is a citizen of the United States of America, and each occupation set
forth opposite an individual's name, refers to employment with Purchaser.
Name, Citizenship Present Principal Occupation
and Current Business Address or Employment
---------------------------- -------------
Edgar John Fullager........................................Chairman and President of Purchaser.
(Citizen of the United Kingdom)
Robert L. Thompson, Jr.....................................Vice President, General Counsel and Secretary of
Sandoz Corporation; Director, Vice President and
Secretary of Purchaser.
</TABLE>
(d) and (e) During the last five years, none of Purchaser or Parent
and, to the best knowledge of Purchaser and Parent, none of the persons listed
above has been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 of the Schedule 13D is hereby amended, supplemented and restated
as follows:
The source of funds to be used to purchase additional shares of Common
Stock will come from the general working capital of Parent and in the aggregate
is expected to amount to approximately $70 million.
Page 7 of 20 Pages
<PAGE>
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended, supplemented and restated
as follows:
On May 23, 1996, Parent delivered to the Board of Directors of the
Company (the "Board") a letter dated May 23, 1996 (the "Proposal Letter") in
which Parent offered to acquire through Purchaser in a cash merger transaction
(the "Proposed Transaction") all the issued and outstanding shares of Common
Stock not currently owned by Purchaser for a purchase price of $17.00 per share.
Parent anticipates that upon completion of the Proposed Transaction, Parent will
seek to cause the Common Stock to be delisted from trading on the NASDAQ
National Market System and to cause the termination of registration of the
Common Stock pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended (the "Act"). The Proposal Letter is attached hereto as Exhibit
99.1 and is incorporated herein by reference in its entirety.
On May 24, 1996, Parent issued a press release relating to the events
described above. Such press release is attached hereto as Exhibit 99.2 and is
incorporated herein by reference in its entirety.
Except as set forth herein, Purchaser and its affiliates have not
formulated any plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the Company or the
disposition of securities of the Company, (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company, (c) a sale or transfer of a material amount of the assets of the
Company, (d) any change in the present Board or management of the Company,
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the Board, (e) any material change in the present
capitalization or dividend policy of the Company, (f) any material change in the
Company's business or corporate structure, (g) any change in the Company's
certificate of incorporation or by-laws or other instrument corresponding
thereto or other actions which may impede the acquisition of control of the
Company by any person, (h) causing a class of the Company's securities to be
deregistered or delisted, (i) a class of equity securities of the Company
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Act or (j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
Item 5 of the Schedule 13D is hereby restated as follows:
(a) and (b) The number of shares of Common Stock beneficially owned by
Parent and Purchaser is now 11,977,699 (including warrants described in Item 6
(the "Warrants") to acquire 1,367,600 shares of Common Stock (the "Warrant
Shares")) and the percentage of the aggregate number of shares outstanding
beneficially owned by Parent and Purchaser is now 76%, assuming exercise of the
Warrants and no other shares of Common Stock being issued pursuant to options or
otherwise. All shares of Common Stock beneficially owned by Parent and Purchaser
have shared voting and dispositive power between Parent and Purchaser.
(c) - (e) Not Applicable.
Page 8 of 20 Pages
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Item 6 of the Schedule 13D is hereby restated as follows:
Acquisition Agreement. The Company, Purchaser and Parent are parties to
the Acquisition Agreement dated December 16, 1991, as amended January 30, 1995
(the "Acquisition Agreement"), pursuant to which the Purchaser (i) consummated a
tender offer for 4,011,684 shares of Common Stock ("Shares") at $70.00 per Share
for an aggregate price of $280,817,880 ("Offer") and (ii) immediately after
consummation of the Offer purchased from the Company on February 19, 1992,
1,982,143 Shares at $56.00 per Share, for an aggregate purchase price of
$111,000,000 (the "Stock Issuance"). When taken together, the Shares purchased
pursuant to (i) the Offer, (ii) the Stock Issuance and (iii) the cash-out of
employee stock options to purchase an aggregate of 158,315 Shares, in the
aggregate, constituted 60% of the then outstanding Shares on a fully diluted
basis (including, without limitation, all Shares issuable upon the conversion of
any convertible securities or upon the exercise of any options, warrants or
rights, in either case, remaining outstanding after the closing).
The Acquisition Agreement provides that, except as set forth below,
during the period (the "Standstill Period") beginning on the date thereof and
ending on February 19, 2002 (unless earlier terminated pursuant to the
provisions of the Acquisition Agreement), neither Parent nor Purchaser will, and
will cause their respective subsidiaries and affiliates, and any person acting
on behalf of any of them (together, the "Purchaser Group"), not to: (i) in any
manner acquire, agree to acquire, make any proposal to acquire or announce or
disclose any intention to make a proposal to acquire, directly or indirectly,
any Shares and any other issued and outstanding securities of the Company
generally entitled to vote for the election of directors of the Company and
other matters for which the holders of Common Stock are entitled to vote
("Voting Securities"), except: (A) pursuant to the Offer in accordance with the
terms and conditions of the Acquisition Agreement; (B) the acquisition of the
Shares pursuant to the Stock Issuance in accordance with the terms and
conditions of the Acquisition Agreement, provided that Purchaser has purchased
Shares pursuant to the Offer; (C) in accordance with the terms and conditions of
certain stock option agreements entered into in connection with the Acquisition
Agreement; and (D) following the closing, pursuant to the Purchaser's "Top-Up
Right" (upon any increase in the number of outstanding Shares from the date of
closing of the Acquisition Agreement until the seventh anniversary of the
closing, Purchaser has the right to subscribe from the Company or purchase in
the market additional Shares in order to maintain 60% fully diluted Share
ownership of the Company); (ii) propose to enter into, or announce or disclose
any intention to propose to enter into, directly or indirectly, any merger or
business combination involving the Company or to purchase, directly or
indirectly, all or substantially all of the assets of the Company, provided,
however, that the foregoing does not act as a limitation or prohibition on
Purchaser's ability to propose to license or to license any patent, patent
application, technology, proprietary right, trade secret or other right of any
kind from the Company; (iii) make, or in any way participate, directly or
indirectly, in any "solicitation" of "proxies" (as such terms are defined or
used in Regulation 14A under the Act) to vote, or seek to advise or influence
any person with respect to the voting of, any Voting Securities, or become a
"participant" in any "election contest" (as such terms are used or defined in
Regulation 14A under the Act) relating to the election of directors of the
Company; provided, however, that Purchaser shall not be deemed to have engaged
in a "solicitation" or to have become a "participant" by reason of the
membership of the designees of Purchaser on the Board or by voting its Shares in
any such election or by reason of the Company's solicitation of proxies in
connection with any annual or special meeting of stockholders of the Company in
accordance with the provisions of the Acquisition Agreement; (iv) form, join in
or in any way participate in a "group" (within the meaning of Section 13(d)(3)
of the Act) or otherwise act in
Page 9 of 20 Pages
<PAGE>
concert with any person, (A) for the purpose of circumventing the provisions of
the Acquisition Agreement or (B) other than with other members of the Purchaser
Group (to the extent permitted by the Acquisition Agreement), for the purpose of
acquiring, holding, voting or disposing of any Voting Securities; or (v)
arrange, or participate in the arranging of, financing for the purchase of any
Voting Securities by any individual, partnership or other entity.
The Acquisition Agreement provides that, notwithstanding the provisions
set forth in the preceding paragraph, following the third anniversary thereof,
Purchaser may make a tender offer for all Shares or Voting Securities or take
any of the actions described in clause (ii) in the preceding paragraph, provided
that such action satisfies the following additional requirements: (i) if a
tender offer, the offer must be a "tender offer" for purposes of, and must be
made in compliance with, Section 14(d)(1) of the Act and the rules and
regulations promulgated thereunder (or any successor provisions thereto); and
(ii) any tender offer or merger or acquisition proposal must be at a price that
is fair to the stockholders of the Company, and must be approved by a majority
of the Company's Independent Directors (as defined below).
The Acquisition Agreement also provides that, promptly upon the
purchase by Purchaser of Shares pursuant to the Offer, and from time to time
thereafter, including, without limitation, following the closing, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as shall give Purchaser representation on the
Board equal to the product of the total number of directors on the Board (giving
effect to the directors elected pursuant to this provision), multiplied by the
percentage that the aggregate number of Shares beneficially owned by Purchaser
or any affiliate of Purchaser following such purchase bears to the total number
of Shares then outstanding, and Parent and Purchaser shall, and shall cause
their affiliates and subsidiaries to, vote all Shares directly or indirectly
beneficially owned by any of them, and the Company shall, at such time, promptly
take all actions necessary to cause Purchaser's designees to be elected as
directors of the Company, including increasing the size of the Board or securing
the resignations of incumbent directors, or both. The Acquisition Agreement also
provides that such members of the Board designated by the Purchaser shall be
divided evenly, as nearly as possible, among the three classes of directors
described in the Company's Certificate of Incorporation.
The Acquisition Agreement further provides that Parent and Purchaser
shall, and shall cause their affiliates and subsidiaries to, vote all Shares
directly or indirectly beneficially owned by any of them, and the Company shall
promptly take all actions necessary to ensure that the Board's membership shall
include three "independent" members who are not employees or consultants of the
Company, or affiliates of such employees or consultants (the "Independent
Directors"). Parent and Purchaser have agreed that they shall, and that they
shall cause their affiliates and subsidiaries to, vote all Shares directly or
indirectly beneficially owned by any of them, and the Company has agreed that it
shall promptly take all actions necessary, to ensure that any successors to such
Independent Directors shall be nominated by the remaining Independent Directors
and shall be elected, provided Parent and Purchaser consent to such election,
which consent shall not be unreasonably withheld; provided that no such consent
shall be required with respect to the re-election of any of the Independent
Directors set forth above.
Stock and Warrant Agreement. On January 30, 1995, Parent, Purchaser and
the Company entered into the Stock and Warrant Purchase Agreement, pursuant to
which Purchaser purchased from the Company, for an aggregate purchase price of
$80,000,000, (i) 4,616,272 Shares and (ii) Warrants to acquire 1,367,600 Warrant
Shares. The Warrants are exercisable, in whole or in part, at the option of the
holder, until the close of business on February 2, 1998, at an exercise price of
$27.50 per Share.
Page 10 of 20 Pages
<PAGE>
The exercise price is subject to adjustment under certain circumstances
specified in the Stock and Warrant Purchase Agreement.
Item 7. Material to be Filed as Exhibits
Item 7 of the Schedule 13D is hereby amended and supplemented by adding
the following Exhibits:
Exhibit 24 Power of Attorney.
Exhibit 99.1 Proposal Letter, dated May 23, 1996, from Parent
to the Board offering to acquire Common Stock.
Exhibit 99.2 Press release issued by Parent on May 24, 1996.
Page 11 of 20 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is true,
complete and correct.
May 24, 1996
SANDOZ LTD.
By: /s/ Robert L. Thompson, Jr.
-------------------------------
Robert L. Thompson, Jr.
Attorney-in-fact
SANDOZ BIOTECH HOLDINGS
CORPORATION
By: /s/ Robert L. Thompson, Jr.
-------------------------------
Robert L. Thompson, Jr.
Vice President
Page 12 of 20 Pages
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
24 Power of Attorney.
99.1 Proposal Letter, dated May 23, 1996, from Parent
to the Board offering to acquire Common Stock.
99.2 Press release issued by Parent on May 24, 1996.
Page 13 of 20 Pages
EXHIBIT 24
----------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That Sandoz Ltd., a Swiss corporation having its principal place of business in
the City of Basle, does hereby make, constitute and appoint:
Robert L. Thompson, Jr. of 608 Fifth Avenue, New York, New York; and
Wayne Merkelson of 608 Fifth Avenue, New York, New York,
or any one of them acting alone, its true and lawful attorneys, for it and in
its name, place and stead, with full power of substitution to represent and act
for it in all matters pertaining to submissions to the Securities and Exchange
Commission, with such changes therein as may be approved by said attorneys, or
any one of them acting alone, and in general to do all things and to perform on
the part of Sandoz Ltd. all acts as said attorneys, or any one of them acting
alone, determines are necessary or advisable in connection with submissions to
the Securities and Exchange Commission, including, without limiting the
generality of the foregoing, the execution and delivery of all documents
required under the Securities Exchange Act of 1934, as amended, all agreements,
officer's and other certificates, and any and all other documents and
instruments required, contemplated by or deemed advisable in connection with
this power of attorney and to otherwise act for and in the name of Sandoz Ltd.
and in its behalf with respect to the transactions described herein fully as if
the duly authorized officers of Sandoz Ltd. were then personally present and
acting.
Sandoz Ltd. hereby ratifies and confirms all that said attorneys or their
substitutes shall lawfully do, or cause to be does, by virtue hereof.
Page 14 of 20 Pages
<PAGE>
2
IN WITNESS WHEREOF, Sandoz Ltd. has caused this power of attorney to be signed
by two duly authorized officers this 21st day of May, 1996.
SANDOZ LTD.
/s/ P. Rickli /s/ R. Breu
------------------------------------
Page 15 of 20 Pages
EXHIBIT 99.1
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Proposal Letter
SANDOZ LTD
CH-4002 BASLE/SWITZERLAND [Sandoz logo]
SyStemix, Inc.
3155 Porter Drive
Palo Alto, CA 93404
USA
Attention: Chairman of the
Board of Directors
23 May 1996
Gentlemen:
Sandoz Ltd. ("Sandoz") is pleased to offer, through its wholly owned subsidiary
Sandoz Biotech Holdings Corporation, to acquire the equity interest represented
by all of the outstanding common stock, par value U.S. $.01 per share, of
SyStemix, Inc. ("SyStemix") not currently owned by Sandoz (the "Shares"). The
principal terms of our offer are as follows:
1. Sandoz would acquire the Shares in a merger transaction pursuant to which
each holder of a Share would receive cash in the amount of U.S.$17.00 per
Share.
2. Consummation of the acquisition would be subject to approval of the
independent directors of SyStemix, as described below, as well as approval
by the Board of Directors of SyStemix.
This offer is made pursuant to Section 2.05(c) of the Acquisition Agreement,
dated as of December 16, 1991, among Sandoz, Sandoz Biotech Holdings Corporation
and SyStemix, as amended as of January 30, 1995 (the "Original Acquisition
Agreement"), and is subject to the approval of a majority of the independent
directors of SyStemix in accordance with Section 2.05(c)(ii) of the Original
Acquisition Agreement.
We assume that the independent directors will constitute a special committee to
consider this offer and that such special committee will retain its own
financial and legal advisors to assist in its deliberations.
Page 16 of 20 Pages
<PAGE>
2
We believe that our offer is fair to, and in the best interests of, SyStemix and
its stockholders (other than Sandoz). The proposed acquisition price is
equivalent to a 55% premium over the price of the Shares on the NASDAQ National
Market System at the close of business on May 22, 1996. Moreover, we believe
that any further growth of SyStemix, and indeed its continued viability, can
best be achieved as an indirect wholly-owned subsidiary of Sandoz.
It is our intention that, once the transaction we are proposing is completed,
Sandoz (and, upon completion of our pending merger, Novartis) will continue to
support actively the scientific research conducted by SyStemix. To this end, we
are committed to creating an effective, incentive-based benefits program which
would allow SyStemix's scientists and other key executives to participate in the
future value generated by SyStemix. We propose to discuss the scope and basic
features of such a program with key members of SyStemix Management at the
earliest convenience.
We wish to make it perfectly clear that we are not interested under any
circumstances in selling our interest in SyStemix and that there is therefore no
prospect of a sale of our controlling interest in SyStemix to a third party.
We invite your representatives to meet with us or our advisors, Morgan Stanley &
Co. Incorporated (Gordon Dyal, tel. 212 761 44 57) and Shearman & Sterling
(David Heleniak, tel. 212 848 70 49), to discuss this proposal at your earliest
convenience. We hope you will give this proposal your prompt attention. We
reserve the right to amend or withdraw this proposal at any time.
Sincerely,
Sandoz Ltd.
/s/ Dr. D. Vasella /s/ Dr. R. Breu
cc: The Board of Directors of Systemix, Inc.
Page 17 of 20 Pages
Exhibit 99.2
------------
PRESS RELEASE
CORPORATE COMMUNICATIONS SANDOZ
CH-4002 BASEL/SCHWEIZ
- -----------------------
PRESS OFFICE Press release
OF THE SANDOZ COMPANIES
- -----------------------
TEL. 061 324 90 01
FAX 061 324 48 84
Sandoz proposes to acquire remaining interest in SyStemix
Basel, 23 May 1996 - Sandoz Ltd. today announced it had submitted a proposal to
the board of SyStemix to acquire all outstanding shares of SyStemix not
currently owned by Sandoz at USD 17 per share. The offered price represents a
premium of 55% over Wednesday's closing price of USD 11 per share.
SyStemix, Inc., based in Palo Alto, California, is a biotechnology company with
world leadership in creating innovative therapies for major disorders of the
blood system based on the use of human hematopoietic stem cells (HSCs).
Collaboration between the two companies began in 1991. In 1992, Sandoz acquired
a 60% interest, which it increased in 1995 to 71.6% on a fully diluted basis.
Dr. Daniel Vasella, CEO of Sandoz Pharma and designated President and
Head of the Executive Committee of Novartis - the company to be created from the
recently announced merger of Sandoz and Ciba-Geigy, said: "We are committed to
strengthening our position in emerging technologies and have full confidence in
SyStemix' innovative approach using HSCs. Sandoz' expertise and resources in R&D
will help accelerate the development of much-needed treatments to enhance
blood-cell recovery in patients with life-threatening diseases such as cancer or
AIDS."
Headquartered in Basel, Switzerland, Sandoz Ltd. is a global
research-based pharmaceuticals and nutrition group, with further activities in
crop protection, seeds and construction technologies. In 1995, Sandoz Group
sales exceeded CHF 15.2 billion. On 7 March 1996, Sandoz and Ciba-Geigy
announced plans to merge and form a new company Novartis. The plan was
approved by both companies' shareholders on 23 and 24 April, and the merger is
still subject to regulatory approvals.
Press Office of the Sandoz Companies
Page 18 of 20 Pages
