Community Health Systems, Inc. (the “Company”) (NYSE: CYH), today announced that it has commenced a cash tender offer for any and all of its outstanding $300,000,000 aggregate principal amount of 6½% Senior Subordinated Notes due 2012 (the “Notes”) on the terms and subject to the conditions set forth in the Company’s Offer to Purchase and Consent Solicitation Statement dated May 31, 2007. The Company is also soliciting consents to certain proposed amendments to the indenture governing the Notes to, among other things, eliminate substantially all of the restrictive covenants, eliminate or modify certain events of default and certain conditions to defeasance of the Notes and eliminate or modify related provisions contained in the indenture and the Notes. The tender offer documents more fully set forth the terms of the tender offer and consent solicitation.
The tender offer will expire at 12:00 midnight, New York City time, on June 27, 2007, unless extended or earlier terminated by the Company. The Company reserves the right to terminate, withdraw or amend the tender offer and consent solicitation at any time subject to applicable law.
The total consideration for each $1,000 principal amount of Notes validly tendered and not withdrawn prior to the Consent Date described below, and accepted for purchase pursuant to the tender offer will be determined as specified in the tender offer documents and will be equal to the present value, minus accrued interest, on the applicable payment date for the tender of Notes of (i) $1,032.50 and (ii) the remaining scheduled interest payments on such Notes after the payment date for the tender of Notes to December 15, 2008 (the “Redemption Date”), in each case determined on the basis of a yield to the Redemption Date equal to the sum of (A) the yield on the 3⅜% U.S. Treasury note due December 15, 2008 (the “Reference Treasury Security”), as calculated by Credit Suisse Securities (USA) LLC (“Credit Suisse”) and Wachovia Securities, acting as dealer managers, in accordance with standard market practice, based on the bid side price for the Reference Treasury Security on the price determination date, as described in the tender offer documents, plus (B) a fixed spread of 50 basis points.
The Company will pay accrued and unpaid interest up to, but not including, the applicable payment date. Each holder who validly tenders its Notes and delivers consents on or prior to 5:00 p.m., New York City time, on June 13, 2007 (the “Consent Date”) will be entitled to a consent payment, which is included in the total consideration above, of $30 for each $1,000 principal amount of Notes tendered by such holder if such Notes are accepted for purchase pursuant to the tender offer. Holders who tender Notes are required to consent to the proposed amendments to the indenture and the Notes. Any tender of Notes prior to the Consent Date may be validly withdrawn and consents may be validly revoked at any time prior to the consent date, but not thereafter except under limited circumstances. The proposed amendments will not become effective, however, until a majority in aggregate principal amount of the outstanding Notes, whose holders have delivered consents to the proposed amendments, have been accepted for payment. Holders who tender Notes after the consent date will not be entitled to receive the consent payment.
The Company has reserved the right to accept for purchase at any time following the Consent Date but prior to the Expiration Date (the "Early Acceptance Time") all Notes then validly tendered. If the Company elects to exercise this option, it will pay for such Notes on a date (the "Early Payment Date") promptly following the Early Acceptance Time. On the Early Payment Date, the Company will also pay accrued and unpaid interest up to, but not including, the Early Payment Date on the Notes accepted for purchase.
Subject to its right to exercise this early acceptance option, the Company currently expects to accept for purchase, and pay the total consideration (as to all Notes tendered prior to the Consent Date) and the tender offer consideration (which is the total consideration less the cash consent payment, as to all Notes tendered after the Consent Date) with respect to, all validly tendered Notes on a date (the "Final Payment Date") promptly following the Expiration Date.
The Company’s obligation to accept for purchase, and to pay for, Notes validly tendered and not withdrawn pursuant to the tender offer and the consent solicitation is subject to the satisfaction or waiver of certain conditions, including, among others, the satisfaction of all conditions to the consummation of the merger under the previously announced merger agreement among the Company, Triad Hospitals, Inc. and FWCT-1 Acquisition Corporation, the Company or one of the Company’s affiliates having issued up to $3.365 billion of debt (the “New Debt”), the Company having sufficient available funds to pay the total consideration with respect to all Notes and the receipt of sufficient consents with respect to the proposed amendments to the indenture and the Notes. The Company intends to finance the purchase of the Notes and related fees and expenses with a portion of the proceeds from the proposed issuance of the New Debt. The complete terms and conditions of the tender offer and the consent solicitation are set forth in the tender offer documents which are being sent to holders of Notes. Holders of Notes are urged to read the tender offer documents carefully.
The Company has retained Credit Suisse and Wachovia Securities to act as Dealer Managers in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at (212) 325-7596 (collect) or Wachovia Securities at (866) 309-6316 (toll free) or (704) 715-8341 (collect). Copies of the tender offer documents and other related documents may be obtained from D.F. King & Co., Inc., the information agent for the tender offer and consent solicitation, at (800) 769-7666 (toll free) or (212) 269-5550 (collect).
The tender offer and consent solicitation is being made solely by means of the tender offer documents. Under no circumstances shall this press release constitute an offer to purchase or the solicitation of an offer to sell the Notes or any other securities of the Company or any other person, nor shall there be any offer or sale of any Notes or other securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This press release also is not a solicitation of consents to the proposed amendments to the indenture and the Notes. No recommendation is made as to whether holders of the Notes should tender their Notes or give their consent.
Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems, Inc. is a leading operator of general acute care hospitals in non-urban communities throughout the country. Through its subsidiaries, the company currently owns, leases or operates 80 hospitals in 23 states. Its hospitals offer a broad range of inpatient medical and surgical services, outpatient treatment and skilled nursing care. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol “CYH”.
Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as “expects,”“plans,” “estimates,”“projects,” “intends,”“believes,” “guidance,” and similar expressions that do not relate to historical matters. These forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors which include, but are not limited to, downturns in economic and market conditions, risks related to the completion of pending transactions, including the acquisition of Triad Hospitals, Inc. (“Triad”)and the obtaining of all anticipated debt financing in connection with such transactions, and the integration of Triad with our existing business, increases in interest rates and operating costs, general volatility of the capital markets, our ability to access the capital markets, changes in the competitive environment in our industry and the markets where we invest, and other risk factors discussed in the Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and other documents filed by the Company with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of today, based upon information known to management as of the date hereof, and the Company assumes no obligation to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.