Hospital Corporation of America and Subsidiaries - Page 15

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          Acquisition as structured, petitioners must possess an equity               
          interest in HealthTrust equal to approximately 15 percent of the            
          total transaction.  The amount stated for the Securities,                   
          therefore, represented the residue after subtracting from the               
          purchase price the cash consideration HealthTrust would pay HCAII           
          and the HCA debts HealthTrust would assume.  HCA Management                 
          considered the $2.1 billion stated purchase price to be a full              
          but fair price for the Facilities.                                          
          The Supplement and Amendment to the Purchase and                            
          Reorganization Agreement                                                    
               During April and May 1987 the operating results of the                 
          Hospitals reflected a decline in financial performance.                     
          Subsequently, sometime between May 30, 1987, and July 1987,                 
          Drexel Burnham Lambert Incorporated (Drexel), an investment                 
          banking firm retained by petitioner to arrange financing for the            
          reorganization, advised petitioners that, because of the decline,           
          it would be difficult to place the debt securities to be used as            
          part of the Acquisition, and, accordingly, the debt to be placed            
          on HealthTrust would have to be reduced from $1.8 billion to $1.6           
          billion.  The lenders also required that certain other changes be           
          made to the Original Agreement.                                             
               Consequently, on September 17, 1987, HCA, HCAII, and                   
          HealthTrust executed a Supplement and Amendment to the Purchase             
          and Reorganization Agreement (Amended Agreement) to change the              
          composition of the consideration to be paid for the Subsidiaries.           
          The principal changes in the Amended Agreement were that (a) the            



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