HCA Will Not Accept Buyout Offer
Tennessee-based hospital chain HCA will not accept a "massive leveraged buyout that would have been among the largest in history" after "the deal fell apart in its final stages," according to several individuals familiar with the negotiations, the Wall Street Journal reports. HCA, which has a market capitalization of $17.6 billion, had formed a special committee to study a buyout offer from a group of private-equity companies that included Bain Capital; Kohlberg Kravis Roberts; Merrill Lynch Private Equity; and the family of Senate Majority Leader Bill Frist (R-Tenn.), whose father founded the company.
According to the Journal, HCA has a debt of $11 billion, which "made it difficult for lending banks and prospective buyers to offer a price that was high enough to satisfy the company." HCA sought a 10% increase in the amount of the offer from the private-equity companies, one individual familiar with the negotiations said, the Journal reports.
HCA owns 182 hospitals and 94 surgery centers and reported $24.5 billion in revenue and $1.4 billion in earnings for 2005 (Berman/Naik, Wall Street Journal, 7/19).