HCA to Spend $350 Million on Stock Buy-Back : Board Cites Company’s Strong Financial Position

Hospital Corp. of America, bolstered by its strong financial position, was authorized by its board of directors Friday to spend up to $350 million to repurchase shares of its common stock, the company’s chairman said.

“In view of HCA’s strong financial position and the recent market prices of our stock, we believe that repurchase of our own shares represents an attractive investment opportunity, which will benefit both the company and our shareholders,” Thomas F. Frist Jr., chairman and chief executive, said in a written statement.

HCA’s stock closed Friday on the New York Stock Exchange at $34 a share, up 75 cents.

The integrated health-care company, which owns or operates 448 hospitals worldwide, will purchase its common stock on the open market and in privately negotiated transactions, Frist said.

May Fear Takeover

One-third of the money to finance the repurchase program was supplied by funds provided under a separate repurchase of a convertible bond by Beverly Enterprises, a Pasadena-based nursing home management company.

“HCA clearly thinks their stock is a better investment than buying more hospitals,” said Randall S. Huyser, a health-care analyst with San Francisco-based Montgomery Securities.

“They (HCA) may also be worried about a takeover . . . from an insurance concern,” he said.

Beverly Enterprises had purchased a bond from HCA earlier this year for a percentage of the California firm’s stock that HCA owned. The latest transaction allowed Beverly Enterprises to repurchase the bond--with a face amount of $120.8 million--for $118.4 million, an HCA official said.