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 50,000,000 shares of its outstanding common stock at a price not
greater than $50.00 nor less than $43.00 per share, net to the seller in
cash, without interest. The tender offer is expected to commence on
October 14, 2005 and to expire, unless extended, at 5:00 p.m., New York
City time, on November 14, 2005. As of September 30, 2005, the Company
had approximately 452.7 million shares of common stock outstanding.
In the tender offer, shareholders will have the opportunity to tender
some or all of their shares at a price within the $43.00 to $50.00 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 50,000,000 shares, or
such lesser number of shares as are properly tendered. If shareholders
holding in the aggregate more than 50,000,000 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 anticipates that it will obtain the funds necessary to purchase
shares tendered in the tender offer by utilizing approximately $500
million of cash on hand and by borrowing approximately $1 billion from
the Company's existing revolving credit facility. In addition, the
Company has obtained a commitment letter from JPMorgan and Merrill Lynch
for a $1 billion short term loan facility which will also be used to
finance the tender offer. In connection with the tender offer, HCA is
seeking an amendment to 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
capitalization. If the Company is unable to obtain the required
amendment prior to the expiration of the tender offer, the Company has
obtained a commitment letter from JPMorgan and intends to enter into a
new $2.425 billion credit facility to replace its existing credit
facility. While the Company has obtained commitments for the $1 billion
short term loan facility and the new $2.425 billion credit facility, if
needed, these commitments are contingent on the satisfaction of various
conditions. Accordingly, in addition to other customary conditions, the
tender offer will be subject to HCA amending its existing credit
facility or refinancing it pursuant to the terms and conditions
contained in the commitment letter with JPMorgan and obtaining the $1
billion short term loan facility pursuant to the terms and conditions
contained in the commitment letter with JPMorgan and Merrill Lynch.
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. Our directors and executive officers have
advised us that they do not intend to tender shares pursuant to the
tender offer.
Merrill Lynch & Co. is the Company's financial advisor. The lead dealer
manager for the tender offer is Merrill Lynch & Co., the 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 14,
2005. 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 amend its existing credit facility or to
refinance it pursuant to the terms and conditions in the related
commitment letter and to obtain the necessary financing for the tender
offer pursuant to the terms contained in the commitment letter from
JPMorgan and Merrill Lynch, (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 affiliated Louisiana, Mississippi and Texas
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, Medicaid and other state programs that may impact
reimbursements to health care providers and insurers, (ix) the outcome
of governmental investigations by the United States Attorney for the
Southern District of New York and the SEC, (x) the ability to attract
and retain qualified management and personnel, including affiliated
physicians, nurses and medical support personnel, (xi) potential
liabilities and other claims that may be asserted against the Company,
(xii) fluctuations in the market value of the Company's common stock,
(xiii) the impact of the Company's charity care and uninsured
discounting policy changes, (xiv) changes in accounting practices, (xv)
changes in general economic conditions, (xvi) future divestitures which
may result in charges, (xvii) changes in revenue mix and the ability to
enter into and renew managed care provider arrangements on acceptable
terms, (xviii) the availability and terms of capital to fund the
expansion of the Company's business, (xix) changes in business strategy
or development plans, (xxi) delays in receiving payments for services
provided, (xx) the possible enactment of Federal or state health care
reform, (xxii) the outcome of pending and any future tax audits, appeals
and litigation associated with the Company's tax positions, (xxiii) 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, (xxiv)
changes in Federal, state or local regulations affecting the health care
industry, (xxv) the ability of the Company to consummate successfully
the divestitures of ten hospitals on a timely basis and in accordance
with the definitive agreements entered into with LifePoint Hospitals,
Inc. and Capella Healthcare, (xxvi) 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, 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.
Investors, Mark Kimbrough, +1-615-344-2688, or
Media, Jeff Prescott, +1-615-344-5708,
both of HCA