HCA (NYSE: HCA) announced today that its Board of Directors has approved
the initiation of a modified "Dutch" auction tender offer to purchase up
to 61,000,000 shares of its outstanding common stock at a price not
greater than $41.00 nor less than $35.00 per share net to the seller in
cash, without interest. The tender offer is expected to commence on
October 13, 2004 and to expire, unless extended, at 12:00 midnight, New
York City time, on Wednesday, November 10, 2004.
In the tender offer, shareholders will have the opportunity to tender
some or all of their shares at a price within the $35.00 to $41.00 price
range. Based on the number of shares tendered and the prices specified
by the tendering shareholders, HCA will determine the lowest per share
price within the range that will enable it to buy 61,000,0000 shares, or
such lesser number of shares as are properly tendered. If shareholders
holding in the aggregate more than 61,000,000 shares properly tender
their shares at or below the determined price per share, HCA will
purchase shares tendered by such shareholders, at the determined price
per share, on a pro rata basis, as will be specified in the offer to
purchase relating to the tender offer that will be distributed to
shareholders. Shareholders whose shares are purchased in the tender
offer will be paid the determined price per share, net in cash, without
interest, promptly following the expiration of the tender offer period,
as it may be extended. HCA will return all shares not purchased to the
shareholders tendering such shares free of charge after the expiration
of the tender offer, as it may be extended. The tender offer will not be
contingent upon any minimum number of shares being tendered. The tender
offer will be subject to a number of other terms and conditions,
including the financing condition described below, as will be specified
in the offer to purchase.
"The tender offer we are announcing today is consistent with the
Company's commitment to enhancing shareholder value and reflects our
confidence in the long-term future of HCA," stated Jack O. Bovender,
Jr., HCA Chairman and CEO. "The tender offer represents an opportunity
for the Company to deliver value to shareholders who elect to tender
their shares, while at the same time increasing the proportional
ownership of non-tendering shareholders in HCA. We believe the Company
possesses the financial strength to successfully complete the tender
offer and the related borrowings without jeopardizing future capital
investments in our existing hospitals and communities."
"With the assistance of management and outside advisors, our Board has
undertaken a review of the Company's strategic plan, its use of cash
flows from operations for, among other things, capital expenditures,
acquisitions, debt repayment, dividends and share repurchases, and a
variety of alternatives for using the Company's available financial
resources. Based upon its review, the Board determined that increasing
the Company's financial leverage to fund the tender offer is a prudent
use of our financial resources and an effective means of providing value
to our shareholders," Bovender continued.
HCA has obtained a commitment letter from JPMorgan for $2.25 billion in
credit facilities, a portion of which will be used to finance the tender
offer. In addition, HCA has obtained a commitment letter from JPMorgan
and Merrill Lynch for a $1.5 billion short-term loan facility which will
also be used to finance the tender offer. Accordingly, the tender offer
will be conditioned upon receipt of this financing pursuant to the terms
and conditions contained in the commitment letters and on terms
satisfactory to HCA on or prior to the expiration date of the tender
offer and other customary conditions.
HCA's Board of Directors has approved the tender offer because it has
concluded that increasing the Company's indebtedness to fund the tender
offer is a prudent use of HCA's financial resources and an effective
means of providing value to HCA's shareholders. However, none of HCA,
its Board of Directors, the lead dealer manager, the dealer manager, the
information agent or the depositary is making any recommendation to
shareholders as to whether to tender or refrain from tendering their
shares into the tender offer. Shareholders must decide how many shares
they will tender, if any, and the price within the stated range at which
they will offer their shares.
Merrill Lynch & Co. is the Company's financial advisor. The lead dealer
manager for the tender offer is Merrill Lynch & Co., dealer manager is
J.P. Morgan Securities Inc., the information agent is Georgeson
Shareholder Communications, Inc., and the depositary is National City
Bank. The offer to purchase, letter of transmittal and related documents
will be mailed to shareholders of record and will also be made available
for distribution to beneficial owners of HCA common stock.
This press release is for informational purposes only and is not an
offer to buy, or the solicitation of an offer to sell, any shares. The
full details of the tender offer, including complete instructions on how
to tender shares, along with the letter of transmittal and related
materials, are expected to be mailed to shareholders on October 13,
2004. Shareholders should read carefully the offer to purchase, the
letter of transmittal and the other related materials when they are
available because they will contain important information. Shareholders
may obtain free copies (when available) of the offer to purchase and
other documents that will be filed by HCA with the Securities and
Exchange Commission (the "SEC") at the SEC's web site at www.sec.gov
or from the information agent, Georgeson Shareholder Communications,
Inc., at (888) 264-7052. Shareholders are urged to read these materials
carefully prior to making any decision with respect to the tender offer.
Cautionary Note Regarding Forward-looking Statements
This press release contains forward-looking statements based on current
management expectations, including statements regarding the Company's
objectives and expectations regarding the benefits that the tender offer
may provide to the Company and its shareholders.
Those forward-looking statements include all statements other than those
made solely with respect to historical fact. Numerous risks,
uncertainties and other factors may cause actual results to differ
materially from those expressed in any forward-looking statements. These
factors include, but are not limited to (i) the number of shares
tendered and the price at which the Company determines to purchase
shares in the tender offer, (ii) the availability and cost of adequate
financing on terms acceptable to the Company, including the ability of
the Company to successfully refinance its existing credit facility and
to borrow approximately $2.5 billion pursuant to the terms and
conditions of the Commitment Letters and on terms satisfactory to HCA,
(iii) increases in the amount and risk of collectability of uninsured
accounts and deductibles and co-pay amounts for insured accounts, (iv)
the ability to achieve operating and financial targets and achieve
expected levels of patient volumes and control the costs of providing
services, (v) the highly competitive nature of the health care business,
(vi) the continuing impact of the hurricanes on the Company's Florida
facilities and the ability to obtain recoveries under the Company's
insurance policies, (vii) the efforts of insurers, health care providers
and others to contain health care costs, (viii) possible changes in the
Medicare and Medicaid programs that may impact reimbursements to health
care providers and insurers, (ix) the ability to attract and retain
qualified management and personnel, including affiliated physicians,
nurses and medical support personnel, (x) potential liabilities and
other claims that may be asserted against the Company, (xi) fluctuations
in the market value of the Company's common stock, (xii) the impact of
the Company's charity care and self-pay discounting policy changes,
(xiii) changes in accounting practices, (xiv) changes in general
economic conditions, (xv) future divestitures which may result in
charges, (xvi) changes in revenue mix and the ability to enter into and
renew managed care provider arrangements on acceptable terms, (xvii) the
availability and terms of capital to fund the expansion of the Company's
business, (xviii) changes in business strategy or development plans,
(xix) delays in receiving payments for services provided, (xx) the
possible enactment of Federal or state health care reform, (xxi) the
outcome of pending and any future tax audits and litigation associated
with the Company's tax positions, (xxii) the outcome of the Company's
continuing efforts to monitor, maintain and comply with appropriate
laws, regulations, policies and procedures and the Company's corporate
integrity agreement with the government, (xxiii) changes in Federal,
state or local regulations affecting the health care industry, (xxiv)
the ability to successfully integrate the operations of Health Midwest,
(xxv) the ability to develop and implement the payroll and human
resources information system within the expected time and cost
projections and, upon implementation, to realize the expected benefits
and efficiencies, and (xxvi) other risk factors detailed in the
Company's filings with the SEC. Many of the factors that will determine
the Company's future results are beyond the ability of the Company to
control or predict. In light of the significant uncertainties inherent
in the forward- looking statements contained herein, readers should not
place undue reliance on forward-looking statements, which reflect
management's views only as of the date hereof. The Company undertakes no
obligation to revise or update any forward-looking statements, or to
make any other forward-looking statements, whether as a result of new
information, future events or otherwise. Notwithstanding any statement
in this press release, the safe harbor protections of the Private
Securities Litigation Reform Act of 1995 do not apply to statements made
in connection with a tender offer.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: Statements in this press release regarding HCA's business
which are not historical facts are "forward-looking statements" that
involve risks and uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see "Risk Factors" in the
Company's Annual Report or Form 10-K for the most recently ended fiscal
year.
http://www.hcahealthcare.com
Investors, Mark Kimbrough, +1-615-344-2688, or
Media, Jeff Prescott, +1-615-344-5708,
both of HCA Inc.