Hospital Corp. of America Gets $5-Billion Offer : Board of Giant Health-Care Firm Will Discuss Takeover Bid by 3 Investors
Hospital Corp. of America, the nation’s biggest hospital management concern, said Thursday that three investors have proposed acquiring the company in a deal that it estimated would cost them about $5 billion.
The company said the group proposed in a letter to pay $47 a share in cash for all of HCA’s common stock.
The company has about 82 million shares of common stock outstanding, according to HCA spokeswoman Mita Gaertnier.
That would make the proposed stock acquisition worth about $3.85 billion. In addition, she said, the company has about $1.2 billion in outstanding debt.
HCA said its management “does not believe that this proposal is in the best interests of the HCA shareholders but intends to discuss the proposal with the HCA board of directors and respond in due course.”
In composite trading on the New York Stock Exchange on Thursday, HCA fell $1 a share to $38.125.
Gaertnier said the company disclosed the proposal after the stock market closed.
HCA identified the bidders as Charles R. Miller, Richard E. Ragsdale and Richard L. Scott. Gaertnier said Miller and Ragsdale are former officers of Republic Health Corp., a Dallas-based health-care concern that was taken over in a leveraged buyout last year.
Scott is a partner in a Dallas law firm.
It said the bidders told the company in their letter that they were “highly confident” they could arrange financing for the deal “based on discussions with several major financial institutions.”
But the statement said the letter gave no indication that they had actually made arrangements to obtain the financing.
HCA was founded in 1968 and owns, manages or has consulting agreements with 488 hospitals with 73,624 beds in the United States and six other countries.
It employs about 75,000 people in the United States, spokesman David McFadden said.
In 1986, the 27-year-old company had earnings of $174.6 million, compared to $283.7 million in 1985 on revenue of $4.93 billion, compared to $4.35 billion.
