HCA Shareholders Approve Buyout
Shareholders of Tennessee-based hospital chain HCA on Thursday approved a $21.3 billion buyout of the company, the Wall Street Journal reports (Wall Street Journal, 11/17).
HCA in July announced the approval of a buyout offer from company co-founder and former Chair Thomas Frist and Hercules Holding, a partnership of private investment funds that includes Bain Capital Partners, Kohlberg Kravis Roberts and Merrill Lynch Global Private Equity. The buyout, expected to close by the end of the year, required approval from federal regulators and a majority of HCA shareholders (American Health Line, 8/14).
At a meeting on Thursday, the holders of 283.5 million HCA shares, or 72.9% of company stock, voted to approve the buyout. Under the buyout, HCA shareholders will receive $51 per share, and the purchasers will assume $11.7 billion in outstanding company debt and borrow as much as $16.8 billion to complete the purchase.
A 13-member board that includes representatives from each of the three private investment funds, two members of the Frist family and HCA President Richard Bracken will administer the company after the buyout, HCA Chair and CEO Jack Bovender said.
According to Bovender, the buyout will allow the company to address problems with bad debt, flat hospital admissions and other issues. He said, "If you've watched our company over the last year, year and a half, we get whipsawed ... based upon quarterly earnings reports," adding, "The analysts and others who follow the hospital industry have so much on flat (patient) volumes and the problems of the uninsured and bad debt that I think they've missed the bigger picture" (Pack, Tennessean, 11/17).