HCA Inc. (NYSE: HCA) today announced that HCA and the other named
parties have entered into a memorandum of understanding with plaintiffs'
counsel in connection with six purported class action lawsuits,
previously consolidated, filed in the Chancery Court for Davidson
County, Tennessee in connection with the proposed acquisition of HCA by
affiliates of Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch
Global Private Equity and HCA Founder Dr. Thomas F. Frist, Jr.
Under the terms of the memorandum, HCA, the other named parties and the
plaintiffs have agreed to settle the lawsuit subject to court approval.
If the court approves the settlement contemplated in the memorandum, the
lawsuit will be dismissed with prejudice. HCA and the other defendants
deny all of the allegations in the lawsuit.
Pursuant to the terms of the memorandum, Hercules Holding II, LLC, the
entity formed by the private equity sponsor group in connection with the
proposed transaction, has agreed to waive that portion in excess of $220
million of any termination fee that it has a right to receive under the
merger agreement. Also, HCA and the other defendants have agreed not to
assert that a shareholder's demand for appraisal is untimely under
Section 262 of the General Corporation Law of the State of Delaware (the
"DGCL") where such shareholder has submitted a written demand for
appraisal within 30 calendar days of the shareholders meeting held to
adopt the merger agreement (with any such deadline being extended to the
following business day should the 30th day fall on a holiday or
weekend). HCA and the other defendants also have agreed not to assert
that (i) the surviving corporation in the merger or a shareholder who is
entitled to appraisal rights may not file a petition in the Court of
Chancery of the State of Delaware demanding a determination of the value
of the shares held by all such shareholders if such petition is not
filed within 120 days of the effective time of the merger so long as
such petition is filed within 150 days of the effective time, (ii) a
shareholder may not withdraw such shareholder's demand for appraisal and
accept the terms offered by the merger if such withdrawal is not made
within 60 days of the effective time of the merger so long as such
withdrawal is made within 90 days of the effective time of the merger,
and (iii) that a shareholder may not, upon written request, receive from
the surviving corporation a statement setting forth the aggregate number
of shares not voted in favor of the merger with respect to which demands
for appraisal have been received and the aggregate number of holders of
such shares if such request is not made within 120 days of the effective
time of the merger so long as such request is made within 150 days of
the effective time.
The memorandum will be null and void and of no force and effect if the
merger is not approved by the affirmative vote of a majority of the
shares of common stock outstanding and entitled to vote at the meeting,
the merger agreement is terminated under circumstances where the merger
has not been previously consummated or final court approval of the
settlement of the class action lawsuits does not occur for any reason.
In addition, the plaintiffs will have the right to terminate the
memorandum if a majority of the shares voted on the proposal to adopt
the merger agreement (excluding shares held by Dr. Frist and certain
entities affiliated with Dr. Frist) are not voted "for" such proposal.
In addition, pursuant to the terms of the memorandum, HCA has agreed to
provide additional information to shareholders through publicly
available filings in order to supplement the proxy statement that has
been provided to HCA's shareholders in connection with the special
meeting of shareholders concerning the proposed merger to occur on
November 16, 2006, at 11:00 a.m., local time, at HCA's executive offices
located at One Park Plaza, Nashville, Tennessee 37203. HCA has filed the
supplemental disclosure with the Securities and Exchange Commission, and
such disclosure may be accessed on the world wide web at http://www.sec.gov
or on the Investor Relations page of the Company's website at http://www.hcahealthcare.com.
Important Additional Information Regarding the Merger Has Been Filed
with the SEC
In connection with the proposed merger, HCA has filed a definitive proxy
statement with the Securities and Exchange Commission. INVESTORS AND
SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT,
BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE MERGER AND THE
PARTIES THERETO. Investors and security holders may obtain a free copy
of the definitive proxy statement and other documents filed by HCA at
the Securities and Exchange Commission's web site at http://www.sec.gov/.
The definitive proxy statement and such other documents may also be
obtained for free from HCA by directing such request to HCA Inc., Office
of Investor Relations, One Park Plaza, Nashville, Tennessee 37203,
telephone: (615) 344-2068.
HCA and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the
solicitation of proxies from its shareholders in connection with the
proposed merger. Information concerning the interests of HCA's
participants in the solicitation, which may be different than those of
HCA shareholders generally, is set forth in HCA's proxy statements and
Annual Reports on Form 10-K, previously filed with the Securities and
Exchange Commission, and in the proxy statement relating to the merger.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements based on current
HCA management expectations. 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, (1) the
occurrence of any event, change or other circumstances that could give
rise to the termination of the merger agreement; (2) the outcome of any
legal proceedings that have been or may be instituted against HCA and
others relating to the merger agreement; (3) court approval of the
memorandum of understanding in connection with the settlement of the six
consolidated purported class action lawsuits filed in connection with
the merger; (4) the inability to complete the merger due to the failure
to obtain shareholder approval or the failure to satisfy other
conditions to completion of the merger; (5) the failure to obtain the
necessary debt financing arrangements set forth in commitment letters
received in connection with the merger; (6) the failure of the merger to
close for any other reason; (7) risks that the proposed transaction
disrupts current plans and operations and the potential difficulties in
employee retention as a result of the merger; (8) the effect of the
announcement of the merger on our customer relationships, operating
results and business generally; (9) the ability to recognize the
benefits of the merger; (10) the amount of the costs, fees, expenses and
charges related to the merger and the actual terms of certain financings
that will be obtained for the merger; and (11) the impact of the
substantial indebtedness incurred to finance the consummation of the
merger. Many of the factors that will determine the outcome of the
subject matter of this press release are beyond HCA's ability to control
or predict. HCA 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.
"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.