Hospital Corporation of America, Inc. 2006: Leveraged Buyout
Roary Capital Partners was considering a proposal from private equity firm Blackstone Partners to join an investor group in outbidding a leveraged buyout offer for HCA, the largest US hospital management company. A competing bid needed to be all cash and exceed the LBO offer of $51 per share, already at an 18 premium to HCA's recent stock price. The original bidders would also receive a $300 million breakup fee if the board rejected their offer for a higher one. In this case students assess HCA and competitors' financial data and the LBO offer to determine whether Roary should join in the competing bid.
Case id: 070303
Supplemental Material: Excel Spreadsheets