Health Management Associates, Inc. (NYSE: HMA) (“Issuer”)
announced today that it has commenced cash tender offers for any
and all of its (i) $400 million outstanding principal amount of
6.125% Senior Notes due 2016 (CUSIP No. 421933AH5) (the “2016
Notes”), and (ii) $875 million outstanding principal amount of
7.375% Senior Notes due 2020 (CUSIP No. 421933AL6) (the “2020
Notes” and, together with the 2016 Notes, the “Notes”). In
conjunction with the tender offers, Issuer is soliciting consents
to eliminate substantially all of the covenants, certain default
provisions applicable to the Notes and certain other provisions
contained in each of the indentures governing the Notes (the
“Indentures”).
On July 29, 2013, Issuer entered into an agreement and plan of
merger, as amended on September 24, 2013 (as amended, the “Merger
Agreement”), with Community Health Systems, Inc., a Delaware
corporation (“CHS”), and FWCT-2 Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of CHS (“Merger Sub”).
Pursuant to the terms of the Merger Agreement and subject to the
satisfaction or waiver of certain conditions contained therein,
Merger Sub, an entity formed by CHS for the sole purpose of
effecting the transactions contemplated by the Merger Agreement,
will be merged with and into Issuer. Issuer will survive the merger
as a direct or indirect wholly owned subsidiary of CHS/Community
Health Systems, Inc., a Delaware corporation and wholly-owned
subsidiary of CHS (such merger, the “Merger”).
CHS intends to consummate one or more debt financing
transactions, so that Issuer, upon surviving the Merger as a direct
or indirect subsidiary of CHS, will have sufficient funds, together
with cash on hand, to pay the Total Consideration (as defined
below) for all tendered Notes and delivered consents, accrued
interest and all related fees and expenses (collectively, the
“Financing Transaction”). The availability and terms of any
financing transactions will be determined by market conditions and
other factors at the time of any such transactions.
The tender offers are scheduled to expire at 11:59 p.m., New
York City time, on February 6, 2014, unless extended or earlier
terminated (the “Expiration Time”). Holders who validly tender
their Notes and provide their consents to the amendments to the
applicable Indenture before 5:00 p.m., New York City time, on
January 23, 2014, unless extended (the “Consent Expiration”), will
be eligible to receive the Total Consideration, which includes a
consent payment. Holders whose Notes are validly tendered and not
withdrawn prior to the Consent Expiration and accepted for purchase
will receive payment of the Total Consideration on the initial
settlement date, which is currently expected to be January 24,
2014. Holders that validly tender their Notes after the Consent
Expiration and prior to the Expiration Time will receive the Tender
Offer Consideration (as defined below), plus accrued and unpaid
interest, promptly after the Expiration Time. Tenders of Notes may
be validly withdrawn and consents may be validly revoked until the
Withdrawal Time (as defined below).
With respect to the 2016 Notes, the “Total Consideration” for
each $1,000 principal amount of 2016 Notes validly tendered and not
validly withdrawn prior to the Consent Expiration is $1,118.13,
which includes a consent payment of $30.00 per $1,000 principal
amount of 2016 Notes. Holders of the 2016 Notes tendering after the
Consent Expiration will be eligible to receive only the “Tender
Offer Consideration,” which is $1,088.13 for each $1,000 principal
amount of 2016 Notes validly tendered prior to the Expiration Time.
With respect to the 2020 Notes, the “Total Consideration” for each
$1,000 principal amount of 2020 Notes validly tendered and not
validly withdrawn prior to the Consent Expiration is $1,161.88,
which includes a consent payment of $30.00 per $1,000 principal
amount of 2020 Notes. Holders of the 2020 Notes tendering after the
Consent Expiration will be eligible to receive only the “Tender
Offer Consideration,” which is $1,131.88 for each $1,000 principal
amount of 2020 Notes validly tendered prior to the Expiration Time.
Holders will also receive accrued and unpaid interest from the last
interest payment on the applicable Notes up to, but not including,
the applicable settlement date for all of such Notes that we accept
for purchase in the tender offer.
Tendered Notes may be withdrawn and consents may be revoked
before 5:00 p.m., New York City time, on January 23, 2014, unless
extended (the “Withdrawal Time”), but generally not afterwards. Any
extension, termination or amendment of the tender offers will be
followed as promptly as practicable by a public announcement
thereof.
Consummation of the tender offers and consent solicitations is
subject to the satisfaction or waiver of certain conditions
including, but not limited to: (i) the consummation of the Merger
pursuant to the terms of the Merger Agreement, (ii) the completion
of the Financing Transaction and availability of sufficient funds,
(iii) the execution and delivery of supplemental indentures, and
(iv) certain other conditions.
The complete terms and conditions of the tender offers and
consent solicitations are set forth in an Offer to Purchase and
Consent Solicitation Statement (the “Offer to Purchase”) and
related Consent and Letter of Transmittal (“Letter of Transmittal”)
that are being sent to holders of the Notes. Copies of the Offer to
Purchase and Letter of Transmittal may be obtained from the Tender
and Information Agent for the tender offer and consent
solicitation, D.F. King & Co. Inc., at (800) 290-6427
(toll-free).
BofA Merrill Lynch and Credit Suisse are the Dealer Managers and
Solicitation Agents for the tender offers and consent
solicitations. Questions regarding the terms of the tender offers
or consent solicitations may be directed to BofA Merrill Lynch at
(888) 292-0070 (toll-free) and (980) 387-3907 (collect) and Credit
Suisse at (800) 820-1653 (toll-free) and (212) 538-2147.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell the Notes or any other securities.
The tender offers and consent solicitations are being made only by
and pursuant to the terms of the Offer to Purchase and the related
Letter of Transmittal. Holders are urged to read the Offer to
Purchase and related documents carefully before making any decision
with respect to the tender offers and consent solicitations.
Holders of Notes must make their own decisions as to whether to
tender their Notes and provide the related consents. None of
Issuer, the Dealer Managers and Solicitation Agents or the Tender
and Information Agent makes any recommendations as to whether
holders should tender their Notes pursuant to the tender offers or
provide the related consents, and no one has been authorized to
make such a recommendation. The tender offers and consent
solicitations are not being made to holders of Notes in any
jurisdiction in which the making or acceptance thereof would not be
in compliance with the securities, blue sky or other laws of such
jurisdiction.
Issuer expressly reserves the right, subject to applicable law,
to terminate the tender offers and consent solicitations. This
press release does not constitute a notice of redemption or an
obligation to issue a notice of redemption in respect of the
Notes.
About HMA
Health Management Associates, Inc., through its affiliates, owns
and manages hospitals and ambulatory surgery centers in small
cities and selected larger urban markets. HMA currently operates 71
hospitals in 15 states with approximately 11,000 licensed beds.
Shares in Health Management Associates are traded on the New York
Stock Exchange under the symbol “HMA.”
Forward-Looking Statements
Certain statements contained in this communication may
constitute “forward-looking statements”. These statements include,
but are not limited to, statements regarding the expected timing of
the completion of the Merger, the benefits of the Merger, including
future financial and operating results, the combined company’s
plans, objectives, expectations and other statements that are not
historical facts. Such statements are based on the views and
assumptions of the management of CHS and Issuer and are subject to
significant risks and uncertainties. Actual future events or
results may differ materially from these statements. Such
differences may result from the following factors: the ability to
close the transaction on the proposed terms and within the
anticipated time period, or at all, which is dependent on the
parties’ ability to satisfy certain closing conditions, including
the receipt of governmental approvals; the risk that the benefits
of the transaction, including cost savings and other synergies may
not be fully realized or may take longer to realize than expected;
the impact of the transaction on third-party relationships; actions
taken by either of the companies; changes in regulatory, social and
political conditions, as well as general economic conditions.
Additional risks and factors that may affect results are set forth
in Issuer’s and CHS’s filings with the Securities and Exchange
Commission, including each company’s Annual Report on Form 10-K for
the fiscal year ending December 31, 2012 or any Quarterly Report on
Form 10-Q for a subsequent period, in each case as may be amended
or supplemented.
The forward-looking statements speak only as of the date of this
communication. HMA does not undertake any obligation to update
these statements.
Health Management Associates, Inc.John Merriwether,
239-552-3415Vice President of Investor RelationsorJoseph Meek,
239-552-3453Vice President & Treasurer
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