Recommends HMA Stockholders Vote FOR
Community Health Systems Transaction
Health Management Associates, Inc. (NYSE:HMA) (“HMA”)
today announced that the Company’s Board of Directors, in
consultation with its outside financial and legal advisors, has
completed its comprehensive review of the definitive merger
agreement, dated July 29, 2013, between HMA and Community Health
Systems, Inc. (NYSE:CYH) (“CHS”) and has unanimously affirmed its
support for the transaction. The Board recommends HMA stockholders
vote “FOR” the adoption of the merger agreement with CHS at the
Special Meeting of the Company’s stockholders to be scheduled. The
Company noted that the merger agreement was previously unanimously
approved by the Company’s former Board on July 29, 2013.
Under the terms of the transaction, HMA will be acquired by CHS
for approximately $7.6 billion, including the assumption of
outstanding indebtedness. CHS will acquire each issued and
outstanding share of the common stock of HMA for $10.50 in cash,
0.06942 of a share of CHS common stock and a Contingent Value
Right, which could yield additional cash consideration of up to
$1.00 per share, depending on the outcome of certain matters
described in the Registration Statement on Form S-4 filed by CHS.
HMA stockholders will own approximately 16 percent of the shares of
the combined company following close of the transaction.
“After conducting an extensive review in conjunction with our
legal and financial advisors, we are confident that this
transaction provides maximum value to HMA stockholders and
represents the best path forward for the Company,” said Steve
Shulman, Chairman of the Board. “In addition to having confidence
in the value of the transaction, we also support the merger’s
strategic rationale and benefits for HMA’s patients, physicians and
Associates across the communities we serve. HMA and Community
Health Systems are stronger together. The combined entity will be
better positioned to address healthcare trends and challenges. In
addition, the combined organization will have a greater local and
regional market depth, expanded physician relations and physician
footprint, and solid clinical operations infrastructure. The
transaction remains on track to close during the first quarter of
2014, as scheduled, and we appreciate the patience of all our
stakeholders as the Board conducted its review.”
“We are excited to combine these two organizations to create a
hospital company with more than 200 facilities and leverage our
relative strengths and combined scale to better serve our patients,
physicians and communities. We are pleased to have the full support
of HMA’s new board of directors as we move forward to complete this
transaction in the first quarter of 2014,” said Wayne T. Smith,
Chairman, President and CEO of Community Health Systems. “This
transaction will broaden our footprint into new geographic markets,
allow us to form stronger networks and improve access to care, and
strengthen our position for greater benefit and success under
health care reform. All of which, when combined with expected
meaningful synergies available to us through our infrastructure and
systems, will enhance value for our shareholders, employees,
physicians and the communities we serve. We look forward to
continuing our work with HMA’s associates and physicians to ensure
a smooth and effective transition.”
Since the current Board was installed on August 16, 2013, it has
met 11 times and conducted 18 committee meetings. The Board engaged
Alvarez and Marsal Healthcare Industry Group, LLC (“A&M”) to
conduct a comprehensive review of HMA’s operations, finance, and
compliance. A&M’s analysis demonstrated, among other things,
that a large initial investment would be necessary to build out
HMA’s information and clinical capabilities, among other things,
and a successive long road to incremental value would not outweigh
the benefits of accepting CHS’s offer. The Board also engaged UBS
Securities LLC (“UBS”) and Lazard Frères & Co. LLC (“Lazard”)
to perform independent evaluations and analyses to formulate
recommendations regarding the transaction with CHS. In connection
with their evaluation and analyses, each of UBS and Lazard
delivered an opinion to the Board of Directors that the
consideration to be received by the Company’s stockholders in the
transaction is fair, from a financial point of view, to our
stockholders. The board also engaged Paul, Weiss, Rifkind, Wharton
& Garrison, LLP as legal counsel.
The Board has also taken actions to lead the organization while
working within the terms of the merger agreement. The Board took
the lead in overseeing the stability and performance of near-term
operations, the retention of key talent in management, the
preservation and strengthening of the consideration paid in the CHS
proposal, the positive forward movement of HMA from a regulatory
and compliance perspective, and the implementation of measures
designed to increase transparency to shareholders.
The parties continue to expect the transaction to close during
the first quarter of 2014. The transaction is subject to
satisfaction of customary closing conditions including approval of
HMA’s stockholders holding 70 percent of HMA’s outstanding shares,
antitrust clearance, receipt of other regulatory approvals and the
absence of certain adverse developments. The Special Meeting of the
Company’s stockholders to vote on the transaction will be scheduled
in connection with the filing of a definitive proxy
statement/prospectus by CHS and HMA.
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.”
Important Information and Where to Find It
In connection with the proposed transaction, CHS has filed with
the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 that includes a preliminary proxy statement
of HMA and a preliminary prospectus of CHS. CHS and HMA plan to
file a definitive proxy statement/prospectus and other relevant
documents with the SEC regarding the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT AND DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT CHS, HMA AND THE MERGER. When
completed and available, the definitive proxy statement/prospectus
and a form of proxy will be mailed to stockholders of HMA. These
materials and other documents filed with the SEC will be available
at no charge at the SEC’s website at www.sec.gov. In addition,
stockholders will be able to obtain copies of the definitive proxy
statement/prospectus (when they become available) and other
documents filed with the SEC from CHS’s website at www.chs.net or
and HMA’s website at www.hma.com or by directing such request to
CHS at 4000 Meridian Boulevard, Franklin, Tennessee 37067,
Attention: Investor Relations, or to HMA at 5811 Pelican Bay
Boulevard, Naples, Florida 34108, Attention: Investor
Relations.
CHS, HMA and certain of their respective directors, executive
officers and other persons may be deemed to be participants in the
solicitation of proxies in respect of the merger. Information
regarding CHS’s directors and executive officers is available in
CHS’s proxy statement filed with the SEC on April 5, 2013 in
connection with its 2013 annual meeting of stockholders, and
information regarding HMA’s directors and executive officers is
available in HMA’s preliminary proxy statement contained in the
registration statement on Form S-4 filed by CHS with the SEC on
September 24, 2013, as may be amended.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Forward-Looking Statements
Certain statements contained in this communication may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. 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 HMA 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 HMA’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, 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.Investor Contact:John
Merriwether, 239-598-3131Vice President of Investor Relations
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