Hospital Corp. of America Approves $5-Billion Sale
Hospital Corp. of America shareholders today overwhelmingly approved selling the nation’s largest hospital management company to a management-led group for $5 billion.
More than 41.7 million shares of common stock were voted in favor of the debt-financed acquisition. About 5 million shares were voted against the sale.
Corporation Chairman Thomas Frist Jr. told a standing-room-only group of shareholders, “This has been a fantastic 20-plus years.
“It’s exceeded many times over the founders’ dreams for the company,” he said.
Shareholders voted on the offer of $51 a share by TF Investments Inc., the management-led group headed by Frist.
Corporation spokesman Victor L. Campbell said the transaction can be valued at $6 billion if both debt and equity in the new company are counted. If the cost of financing is not counted, the price tag is about $3.6 billion, he said.
A $1.3-billion short-term loan must be repaid within two years, and Campbell said some corporation assets will be sold to meet that obligation. The loan helped finance the buyout.
Campbell said a decision still has not been reached on which assets will be sold.
The corporation is the leading hospital management company in the United States, with properties that include 79 medical-surgical hospitals and 48 psychiatric hospitals.
He said the company’s proxy statement to shareholders indicated that subsidiary properties probably will be the first to go.
“It would be fair to say the company has no agreement to sell any of its hospital facilities at this time,” Campbell said.
The management group submitted the only buyout proposal by a Nov. 18 deadline set by the corporation’s board of directors. The board approved the buyout Nov. 22.