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that reduction, the Common Stock Warrants issued to HCA would be
valued at approximately $47 million. HealthTrust made no change
to the fair market value placed on the Preferred Stock.
HealthTrust informed the SEC that the values placed on the
Preferred Stock by Goldman Sachs and by J.C. Bradford could be
reconciled because the Preferred Stock constituted an asset to
HCA but was a liability to HealthTrust, and because HealthTrust
had to increase ratably the recorded value of that stock over the
term of the Preferred Stock until the applicable accounts
reflected the $50 per share mandatory redemption value.
For Federal income tax purposes, HealthTrust reflected the
values for the Preferred Stock as calculated by J.C. Bradford and
the value of the Common Stock Warrants as calculated by J.C.
Bradford but adjusted as agreed to with the SEC.
Interstate Valuation
The ESOP Committee retained Interstate to render an opinion
on the fairness of the Acquisition to the ESOP (Interstate
Valuation). In a report dated September 17, 1987, Interstate
stated that it believed that the Acquisition was fair to the
ESOP.
Subsequent Public Offering
During December 1991, HealthTrust made a public offering of
its Common Stock. Immediately thereafter, pursuant to an
agreement between HCAII and HealthTrust entered into during June
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