UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
| o | Preliminary Proxy Statement | |||
| o |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| o | Definitive Proxy Statement | |||
| þ | Definitive Additional Materials | |||
| o | Soliciting Material Pursuant to §240.14a-12 | |||
| HCA INC. | ||||
| (Name of Registrant as Specified In Its Charter) | ||||
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
| Payment of Filing Fee (Check the appropriate box): | ||||
| þ | No fee required. | |||
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
| (1) | Title of each class of securities to which transaction applies: | |||
| (2) | Aggregate number of securities to which transaction applies: | |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
| o | Fee paid previously with preliminary materials. | |||
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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| (2) |
Form, Schedule or Registration Statement
No.: |
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| (3) |
Filing
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| (4) |
Date
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On or about October 17, 2006, we mailed a proxy statement
relating to a special meeting of shareholders of HCA Inc.
(“HCA” or the “Company”) scheduled for
November 16, 2006 to vote on a proposal to adopt the
Agreement and Plan of Merger, dated as of July 24, 2006, by
and among the Company, Hercules Holding II, LLC, a Delaware
limited liability company, and Hercules Acquisition Corporation,
a Delaware corporation and a wholly-owned subsidiary of Hercules
Holding II, LLC.
As disclosed in the definitive proxy statement, HCA,
Jack O. Bovender, Jr., Richard M. Bracken, each of the
Company’s directors, and the Investor Group (as defined in
the definitive proxy statement) are defendants in six class
action lawsuits that have been consolidated in the Chancery
Court for Davidson County, Tennessee in connection with the
Company’s proposed merger with an entity currently
controlled by affiliates of Bain Capital Partners, Kohlberg
Kravis Roberts & Co. and Merrill Lynch Global
Private Equity. HCA and the other named parties have entered
into a memorandum of understanding with plaintiffs’ counsel
in connection with the aforementioned class action lawsuits (the
“Memorandum of Understanding”). Under the terms of the
Memorandum of Understanding, HCA, the other named parties and
the plaintiffs have agreed to settle the lawsuit subject to
court approval. If the court approves the settlement
contemplated in the Memorandum of Understanding, the lawsuit
will be dismissed with prejudice.
Pursuant to the terms of the Memorandum of Understanding,
Hercules Holding II, LLC, the entity formed by the Investor
Group in connection with the proposed transaction, has agreed to
waive that portion in excess of $220 million of any
termination fee that it has a right to receive under the merger
agreement. Also, HCA and the other parties have agreed not to
assert that a shareholder’s demand for appraisal is
untimely under Section 262 of the General Corporation Law
of the State of Delaware (the “DGCL”) where such
shareholder has submitted a written demand for appraisal within
30 calendar days of the shareholders meeting held to adopt the
merger agreement (with any such deadline being extended to the
following business day should the 30th day fall on a
holiday or weekend). HCA and the other parties also have agreed
not to assert that (i) the surviving corporation in the
merger or a shareholder who is entitled to appraisal rights may
not file a petition in the Court of Chancery of the State of
Delaware demanding a determination of the value of the shares
held by all such shareholders if such petition is not filed
within 120 days of the effective time of the merger so long as
such petition is filed within 150 days of the effective time,
(ii) a shareholder may not withdraw such shareholder’s
demand for appraisal and accept the terms offered by the merger
if such withdrawal is not made within 60 days of the effective
time of the merger so long as such withdrawal is made within 90
days of the effective time of the merger, and (iii) that a
shareholder may not, upon written request, receive from the
surviving corporation a statement setting forth the aggregate
number of shares not voted in favor of the merger with respect
to which demands for appraisal have been received and the
aggregate number of holders of such shares if such request is
not made within 120 days of the effective time of the merger so
long as such request is made within 150 days of the effective
time.
The Memorandum of Understanding will be null and void and of no
force and effect if the merger is not approved by the
affirmative vote of a majority of the shares of common stock
outstanding and entitled to vote at the meeting, the merger
agreement is terminated under circumstances where the merger has
not been previously consummated or final court approval of the
settlement of the aforementioned class action lawsuits does not
occur for any reason. In addition, the plaintiffs will have the
right to terminate the Memorandum of Understanding if a majority
of the shares voted on the proposal to adopt the merger
agreement (excluding shares held by Dr. Frist and certain
entities affiliated with Dr. Frist) are not voted
“for” such proposal.
In addition, pursuant to the terms of the Memorandum of
Understanding, HCA has agreed to make the supplemental
disclosures set forth below, but HCA does not make any admission
that such supplemental disclosures are material.
The following supplements the disclosure included in the
definitive proxy statement.
| (1) | The section of the proxy statement entitled “Special Factors — Background of the Merger” is hereby supplemented as follows: |
The Company has previously disclosed that on July 18, 2006,
representatives of the sponsors contacted representatives of
Credit Suisse by telephone and informed them that the sponsors
would be willing to submit a proposal for a sale of the Company
at $50.50 per share, subject to the same conditions
as their prior indication. The Company supplementally notes
that, when Dr. Frist joined the July 18, 2006 meeting
by telephone, he advised the special committee that
representatives of the sponsors had requested that he relay the
increased price indication of $50.50 per share to the
special committee as had previously been communicated to Credit
Suisse.
Pursuant to an engagement later dated July 23, 2006, the
sponsors engaged Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“Merrill Lynch”) to act as their
financial advisor in connection with the possible acquisition of
HCA. Merrill Lynch was retained to provide strategic advice
relating to structuring and negotiating a possible acquisition
of HCA. Under the terms of the engagement letter, the sponsors
have agreed to pay Merrill Lynch a fee for its services of
$35 million in the event that the merger is consummated. In
addition, in the event that a termination fee is payable to
Parent pursuant to the merger agreement, Merrill Lynch is
entitled to receive a fee of $5 million. The sponsors have
also agreed to reimburse Merrill Lynch for certain of its
expenses incurred in connection with its engagement. In
addition, the sponsors have agreed to indemnify Merrill Lynch
and any of its affiliates and their respective directors,
officers, employees, agents and controlling persons against
certain liabilities and expenses relating to or arising out of,
or in connection with, any transaction contemplated by the
engagement.
| (2) | The section of the proxy statement entitled “Special Factors — Financing of the Merger — Equity Financing” is hereby supplemented as follows: |
The Company has previously disclosed that the amount of equity
required to be funded by the private equity funds sponsored by
each of Bain, KKR and Merrill Lynch will be reduced on a pro
rata basis to the extent of certain cash on hand of the Company,
including cash that may be available as a result of dividends
paid to HCA from its wholly-owned subsidiaries. The Company
notes that its wholly-owned insurance subsidiary, Health Care
Indemnity, Inc., has declared a dividend in the amount of
$365 million. The dividend has been approved by applicable
regulatory authorities and is anticipated to be paid to the
Company following adoption of the merger agreement by HCA’s
shareholders and prior to the consummation of the merger.
| (3) | The section of the proxy statement entitled “Special Factors — Litigation Related to the Merger” is hereby supplemented as follows: |
The Company believes that, under Delaware law, the consummation
of the merger will terminate shareholders’ equity interest
in the Company and thereby extinguish the shareholder derivative
claims asserted in Raymond Lynch, Derivatively on Behalf of
HCA Inc. v. Jack O. Bovender, Jr., et. al. and HCA
Inc., Civil Action No. 06C127 (pending in the Circuit
Court for the State of Tennessee, 20th Judicial District
Davidson County, at Nashville), and In re HCA, Inc.
Derivative Litigation, No. 3:05-0968 (pending in the
United States District Court for the Middle District of
Tennessee, at Nashville) (collectively, the “Derivative
Cases”). The Company has engaged in discussions with the
shareholder plaintiffs in the Derivative Cases regarding the
extinguishment of their cases and the plaintiffs have indicated
that they disagree with the Company’s interpretation of
Delaware law. In connection with the entry into the Memorandum
of Understanding, the Company has determined that it is in the
Company’s best interest to settle the Derivative Cases and
has agreed in principle to do so.
| (4) | The section of the proxy statement entitled “Important Information About HCA — Projected Financial Information” is hereby supplemented as follows: |
The Company has previously disclosed that certain members of
senior management have interests in the merger different from,
and in addition to, those of other shareholders of HCA. In
addition, the Company supplementally notes that the members of
senior management of the Company who prepared the projected
financial information, including the Final Management
Projections provided to the special committee, Credit Suisse and
Morgan Stanley, have interests in the transaction that are
different from, and/or in addition to, the interests of
HCA’s shareholders. These members of senior management,
including Messrs. Bovender, Bracken, Johnson and certain
group level executives, are entitled to certain payments upon
consummation of the merger and have committed to invest certain
amounts into the surviving corporation. See “Interests of
the Company’s Directors and Executive Officers in the
Merger — HCA Equity Compensation and Bonus
Plans” and “— New Arrangements with the
Surviving Corporation After Closing.”
| (5) | The section of the proxy statement entitled “Important Information About HCA — Prior Stock Purchases” is hereby supplemented as follows: |
The following tables set forth additional information regarding
purchases of HCA Common Stock by HCA pursuant to its open market
purchase program for the periods indicated.
| Quarter Ended | ||||||||||||||||||||||||
| 9/30/04 | 12/31/04 | |||||||||||||||||||||||
| Number of | Number of | |||||||||||||||||||||||
| Range of Price($) | Average Price($) | Shares | Range of Price($) | Average Price($) | Shares | |||||||||||||||||||
|
HCA Inc.
|
— | — | — | 39.35 - 40.89 | 40.29 | 880,351 | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||
| 3/31/05 | 6/30/05 | |||||||||||||||||||||||
| Number of | Number of | |||||||||||||||||||||||
| Range of Price($) | Average Price($) | Shares | Range of Price($) | Average Price($) | Shares | |||||||||||||||||||
|
HCA Inc.
|
— | — | — | — | — | — | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||
| 9/30/05 | 12/31/05 | |||||||||||||||||||||||
| Number of | Number of | |||||||||||||||||||||||
| Range of Price ($) | Average Price ($) | Shares | Range of Price ($) | Average Price ($) | Shares | |||||||||||||||||||
|
HCA Inc.
|
— | — | — | 50.98 - 52.47 | 51.80 | 7,952,504 | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||
| 3/31/06 | 6/30/06 | |||||||||||||||||||||||
| Number of | Number of | |||||||||||||||||||||||
| Range of Price ($) | Average Price ($) | Shares | Range of Price ($) | Average Price ($) | Shares | |||||||||||||||||||
|
HCA Inc.
|
47.78 - 51.51 | 49.87 | 13,056,700 | — | — | — | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||
| 9/30/06 | ||||||||||||||||||||||||
| Number of | ||||||||||||||||||||||||
| Range of Price ($) | Average Price ($) | Shares | ||||||||||||||||||||||
|
HCA Inc.
|
— | — | — | |||||||||||||||||||||
Important Additional Information Regarding the Merger
In connection with the proposed Merger, HCA has filed a
definitive proxy statement with the Securities and Exchange
Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ
THE DEFINITIVE PROXY STATEMENT, BECAUSE IT CONTAINS IMPORTANT
INFORMATION ABOUT THE MERGER AND THE PARTIES THERETO. Investors
and security holders may obtain a free copy of the definitive
proxy statement and other documents filed by HCA at the
Securities and Exchange Commission’s web site at
http://www.sec.gov/. The definitive proxy statement and
such other documents may also be obtained for free from HCA by
directing such request to HCA Inc., Office of Investor
Relations, One Park Plaza, Nashville, Tennessee 37203,
telephone: (615) 344-2068.
HCA and its directors, executive officers and other members of
its management and employees may be deemed to be participants in
the solicitation of proxies from its shareholders in connection
with the proposed Merger. Information concerning the interests
of HCA’s participants in the solicitation, which may be
different than those of HCA shareholders generally, is set forth
in HCA’s proxy statements and Annual Reports on
Form 10-K,
previously filed with the Securities and Exchange Commission,
and in the proxy statement relating to the Merger.