HCA Deal has "go shop" provision

Bill Sjostrom —  25 July 2006

I took a quick look at the HCA merger agreement to see whether any provisions would catch my eye. One did. The agreement contains a “go shop” provision (see earlier discussion of “go shops” here). Until 11:59 p.m. (EST) on September 12, 2006, HCA is free to solicit competing bids (see Section 7.4), although if it takes a better deal the other side is entitled to a $300 million breakup fee (the breakup fee is $500 million outside of the “go shop” context).

Incidentally, as widely reported, the HCA deal will be the biggest LBO ever topping the 1988 $31 billion RJR Nabisco deal by $2 billion. But in today’s dollars, the RJR deal is still number 1. coming in at roughly $45 billion.