HCA Inc. (NYSE: HCA) announced today the final results of its modified
"Dutch" auction tender offer to purchase up to 50,000,000 shares of the
Company's common stock, which expired at 5:00 p.m., New York City time,
on November 14, 2005.
Based on the final count by National City Bank, the depositary for the
tender offer, 28,739,638 shares of common stock were properly tendered
and not withdrawn at a price at or below $50.00 per share, including
shares that were tendered through notice of guaranteed delivery.
Accordingly, HCA has accepted for purchase an aggregate of 28,739,638
shares at a purchase price of $50.00 per share, totaling $1.44 billion.
Because HCA has accepted all of the shares tendered at or below the
$50.00 per share purchase price, there will not be any proration of the
shares accepted for purchase. The shares accepted for purchase by the
Company represent approximately 6.3 percent of the Company's outstanding
shares of common stock. Payment for the shares accepted for purchase
will be done promptly by the depositary. As a result of completing the
tender offer, HCA has approximately 424.2 million shares of common stock
outstanding.
The Company is authorized to repurchase additional shares in an amount
up to the remainder of the $2.5 billion authorization (approximately $1
billion) from time to time through open market purchases, or in private
or other transactions. Rule 13e-4(f) under the Securities Exchange Act
of 1934, as amended, prohibits the Company from purchasing any shares,
other than in the tender offer, until at least ten business days after
the expiration of the tender offer. Accordingly, any such additional
repurchases outside of the tender offer may not be consummated until at
least ten business days after the expiration of the tender offer.
HCA will obtain the funds necessary to purchase shares tendered in the
tender offer by utilizing approximately $600 million of cash on hand and
by borrowing approximately $800 million under the Company's $1 billion
short term loan facility that was entered into in order to finance the
tender offer. In connection with the tender offer, HCA has amended its
existing revolving credit facility and the related senior term loan to
modify the compliance levels for its required ratio of consolidated
total debt to consolidated total capitalization.
On October 13, 2005, the Company stated that completion of the planned
$2.5 billion modified "Dutch" auction tender offer, within a price range
of $43.00 to $50.00 per share, would provide an estimated $0.17 to $0.22
per diluted share benefit in 2006 (fewer shares outstanding offset by
higher interest expense). As a result of only $1.44 billion of stock
being tendered at $50.00 per share, the Company now estimates the
benefit will approximate $0.10 to $0.11 per diluted share for 2006. The
Company is unable to estimate the potential earnings per share benefit
of future purchases, if any, of HCA shares under the remaining share
repurchase authorization.
Any questions with regard to the tender offer may be directed to
Georgeson Shareholder Communications, Inc., the information agent, at
(888) 264-7052. The lead dealer manager for the tender offer was Merrill
Lynch & Co. and the dealer manager for the tender offer was JPMorgan.
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 increased leverage
resulting from the financing of the tender offer, (ii) increases in the
amount and risk of collectability of uninsured accounts and deductibles
and co-pay amounts for insured accounts, (iii) the ability to achieve
operating and financial targets and achieve expected levels of patient
volumes and control the costs of providing services, (iv) the highly
competitive nature of the health care business, (v) the continuing
impact of hurricanes on the Company's facilities and the ability to
obtain recoveries under the Company's insurance policies, (vi) the
efforts of insurers, health care providers and others to contain health
care costs, (vii) possible changes in the Medicare, Medicaid and other
state programs that may impact reimbursements to health care providers
and insurers, (viii) the outcome of governmental investigations by the
United States Attorney for the Southern District of New York and the
SEC, (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 uninsured 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, appeals 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 of the Company to successfully consummate the hospital
divestitures on a timely basis and in accordance with the definitive
agreements entered into with LifePoint Hospitals, Inc. and Capella
Healthcare, (xxv) the ability to develop and implement the payroll and
human resources information systems within the expected time and cost
projections and, upon implementation, to realize the expected benefits
and efficiencies, (xxvi) the outcome of certain class action and
derivative litigation filed with respect to the Company, and (xxvii)
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.
Investor, Mark Kimbrough, +1-615-344-2688, or
Media, Jeff Prescott, +1-615-344-5708,
both of HCA