Massive leveraged buyout of HCA fails

Published on:
12 September 2006 at 10:21 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00007080-massive-leveraged-buyout-of-hca-fails/

Looking to improve its stock price through share repurchase and increased dividends, HCA Inc. was negotiating a massive leveraged buyout of the hospital chain. The deal, though, according to a story running in the Wall Street Journal (and covered by Reuters), went south leaving HCA alone, unsold, in the cold.

Had the deal between HCA and a consortium of bidders gone through ? a consortium that included Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch Private Equity and the family of U.S. Senate Majority Leader Bill Frist ? it would have been the largest in history.

What went wrong? A likely candidate is HCA?s exorbitant $11 billion debt load, which made it difficult for lending banks and prospective buyers to offer a price that was high enough to satisfy the company.

HCA has so far remained mum on these recent developments.