- 15 - 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) thePage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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