HCA Shareholders Want Bigger Payout in Buyout

by Mike Bevel, CollectionIndustry.com

This summer, the Hospital Corporation of America Inc.?s board agreed to sell the nation’s largest for-profit hospital chain to co-founder and board member Thomas F. Frist Jr. (brother of Republican Senate majority leader Bill Frist) and a group of three private equity firms for about $33 billion, or $51 a share.

$33 billion?s nothing to sneeze at ? unless you?re Charles A. Corry. Corry is an HCA shareholder and former chairman and CEO of USX Corp. For Corry, $51 a share isn?t as good as the $58 a share the stock was trading for little over a year ago. So, in an attempt to convince others of his rightness in demanding a higher price for the sale, Corry, along with several other investors, sued the company after the buyout was announced over the summer.

Corry and Co. claim altruism. They?re worried money was left on the table that could have benefited all of the shareholders, not just the Nashville-based company’s top executives and a few Wall Street pros.

Corry’s and five other lawsuits against HCA will be heard as a single case in Davidson County Chancery Court. Darren Robbins, a lead attorney in the case, said the buyout process was designed to stifle competition and “not maximize shareholder value.”

HCA shareholders are scheduled to vote on the buyout offer at a special meeting Nov. 16 at the hospital company’s Nashville headquarters, but Corry, the former steel industry executive who is suing HCA over the deal, has said in interviews he’s hopeful the courts will agree the price isn’t right.

“I want a judge to look at this and say, ‘Wait a minute. Who’s taking care of these shareholders?’” he said.