ONTARIO,
Calif., Aug. 8, 2024 /PRNewswire/ -- Prime
Healthcare Services, Inc. (the "Company" or "Prime
Healthcare") today announced that it has commenced a cash tender
offer (the "Tender Offer") to purchase any and all of its
outstanding 7.250% Senior Secured Notes due November 1, 2025 (the "Notes"). As of
August 8, 2024, Prime Healthcare had
$874,000,000 aggregate principal
amount of notes outstanding. In conjunction with the Tender Offer,
Prime Healthcare is soliciting consents (the "Consent
Solicitation") to adopt certain proposed amendments to the
indenture governing the Notes (the "Indenture") to eliminate
certain of the covenants, restrictive provisions and events of
default from such Indenture (collectively, the "Proposed
Amendments") and to effect the release of liens on the collateral
securing the Notes (the "Collateral Release").
Prime Healthcare is making the Tender Offer and Consent
Solicitation pursuant to, and subject to the terms and conditions
of, the Offer to Purchase and Consent Solicitation Statement, dated
as of August 8, 2024 (as it may be
amended or supplemented, the "Statement"). The Tender Offer will
expire at 5:00 p.m., New York City time, on September 6, 2024, unless extended or earlier
terminated as described in the Statement (such time and date, as
they may be extended, the "Expiration Time").
Certain information regarding the Notes and the Tender Offer is
set forth in the table below.
Title of
Security
|
CUSIP/ISIN
Nos.
|
Aggregate
Principal
Amount Outstanding
|
Reference
U.S.
Treasury
Security
|
Bloomberg
Reference
Page
|
Fixed
Spread
|
Early
Participation
Payment per
$1,000
Principal Amount
of
Notes(1)(2)(3)
|
7.250%
Senior
Secured Notes
due
November 1,
2025
|
74165HAB4/
US74165HAB42
(144A)
U7410WAB1/
USU7410WAB10
(Reg S)
|
$874,020,000
|
4.375% U.S.
Treasury
due October 31,
2024
(CUSIP
91282CFQ9)
|
PX3
|
+0 bps
|
$30.00
|
(1)
|
The Total Consideration
(as defined below) for the Notes validly tendered prior to or at
the applicable Early Participation Deadline (as defined below) and
accepted for purchase is calculated using the Fixed Spread and is
inclusive of the applicable Early Participation Payment (as defined
below).
|
(2)
|
In order to be eligible
to receive the Early Participation Payment, Holders (as defined
below) must validly tender their Notes and deliver their related
consents at or prior to the Early Participation
Deadline.
|
(3)
|
Per $1,000 principal
amount of Notes validly tendered and not validly withdrawn at or
prior to the Early Participation Deadline and accepted for purchase
(the "Early Participation Payment").
|
The "Total Consideration" per $1,000 principal amount of Notes validly tendered
and accepted for purchase pursuant to the Tender Offer will be
determined in the manner described in the Statement by reference to
the applicable fixed spread (the "Fixed Spread") specified for the
Notes in the table above over the yield to maturity (the "Reference
Yield") based on the bid side price of the U.S. Treasury
Security (the "Reference U.S. Treasury Security") specified in the
table above, as calculated by Barclays Capital Inc. (the
"Dealer Manager and Solicitation Agent") at 9:00 a.m., New York
City time, on August 22, 2024
(subject to certain exceptions set forth in the Statement, such
time and date, as the same may be extended, the "Price
Determination Date"). The Total Consideration is inclusive of the
applicable Early Participation Payment. The "Tender Offer
Consideration" will equal the Total Consideration minus the Early
Participation Payment.
Any Notes that have been validly tendered may be withdrawn at
any time prior to 5:00 p.m.,
New York City time, on
August 21, 2024, unless extended or
terminated (such date and time, as the same may be extended, the
"Withdrawal Deadline"). Holders who validly tender at or prior to
5:00 p.m., New York City time, on August 21, 2024 (the "Early Participation
Deadline") (and not validly withdrawn at or prior to the Withdrawal
Deadline), and accepted for purchase will receive the Total
Consideration, which includes the Early Participation Payment.
Holders of Notes (collectively, the "Holders") who validly tender
$1,000 principal amount of Notes at
or before 5:00 p.m., New York City time, on September 6, 2024, unless extended or terminated
(such date and time, as the same may be extended, the "Expiration
Time"), and not validly withdrawn, and whose Notes are accepted by
Prime Healthcare, will be eligible to receive the Tender Offer
Consideration, which does not include the Early Participation
Payment. Holders of Notes validly tendered following the Early
Participation Deadline, but on or prior to the Expiration Time, and
accepted for purchase, will receive the Tender Offer Consideration
(which will not include the Early Participation Payment). To be
eligible to receive the Tender Offer Consideration, any withdrawn
Notes must be validly re-tendered and not validly withdrawn prior
to the Expiration Time. Only Holders that validly tender
and deliver (and do not validly withdraw and revoke) their Notes
and related consents at or prior to the Early Participation
Deadline and whose Notes are accepted for purchase by Prime
Healthcare will be entitled to receive the Total Consideration
(including the Early Participation Payment) on the applicable
Settlement Date. In addition to the Total Consideration or
Tender Offer Consideration, as applicable, tendering Holders whose
Notes are accepted for purchase pursuant to the Tender Offer will
receive accrued and unpaid interest from the last interest payment
date with respect to the Notes to, but not including, the
applicable Settlement Date.
Holders may not deliver consents to the Proposed Amendments and
Collateral Release in the Consent Solicitation without tendering
Notes in the Tender Offer, and may not tender Notes in the Tender
Offer without delivering consents to the Proposed Amendments and
Collateral Release in the Consent Solicitation.
The "Early Settlement Date" will be, at the Prime Healthcare's
option, any time on or after the Price Determination Date and prior
to the Expiration Time, subject to the satisfaction or waiver of
all conditions to the consummation of the Tender Offer and the
Consent Solicitation, including the consummation of the Financing
Condition (as defined below) and satisfaction of the Requisite
Consents Condition (as defined below). The "Final Settlement Date"
will be promptly after the Expiration Time. We refer to the Early
Settlement Date and the Final Settlement Date as the "Settlement
Date," as applicable.
Prime Healthcare's obligation to consummate the Tender Offer and
Consent Solicitation are subject to the satisfaction or waiver of
certain conditions, which are more fully described in the
Statement, and include, among other things, (i) Prime Healthcare's
issuance of $1.0 billion aggregate
principal amount of senior secured notes due 2029 and the
completion of one more or more debt financing transactions in an
amount that is sufficient to fund the purchase of all of the
outstanding Notes and to pay all fees and expenses associated with
such financing and the Tender Offer and Consent Solicitation (the
"Financing Condition") and (ii) the solicitation of consents
representing at least 66-2/3% in aggregate principal amount of the
Notes outstanding (the "Requisite Consent Condition").
To the extent any Notes are not tendered and accepted for
purchase pursuant to the Tender Offer, Prime Healthcare may choose,
but has no obligation, to satisfy and discharge the Indenture
governing the Notes by sending a notice of redemption to the
trustee under the Indenture for the redemption of all outstanding
Notes on November 1, 2024, at a price
equal to 100.00% of the aggregate principal amount of the Notes to
be redeemed, plus accrued and unpaid interest up to, but not
including, the date of redemption.
Prime Healthcare is soliciting consents from the Holders (i) to
the Proposed Amendments to eliminate certain covenants, restrictive
provisions and events of default applicable to the Notes, which
will be effected by the execution and delivery of a supplemental
indenture to the Indenture, containing the Proposed Amendments and
(ii) to effect the release of liens on the collateral securing the
Notes. The consent of the Holders of at least a majority in
aggregate principal amount of the Notes outstanding will be
required to give effect to the Proposed Amendments. The consent of
the Holders of at least 66-2/3% in aggregate principal amount of
the Notes outstanding will be required to give effect to the
Collateral Release.
Barclays Capital Inc. is acting as the Dealer Manager and
Solicitation Agent for the Tender Offer and Consent Solicitation.
D.F. King & Co., Inc. is serving as the Depositary and
Information Agent. Copies of the Statement and related tender
offering materials may be obtained by contacting the Information
Agent at (212) 269-5550 (banks and brokers) and at (888) 605-1958
(all others) or by email at primehealthcare@dfking.com. Questions
regarding the Tender Offer should be directed to Barclays at +1
(212) 528-7581 (collect) and +1 (800) 438-3242 (toll free).
No Offer or Solicitation
None of the Prime Healthcare or its subsidiaries, their
respective Boards of Directors, the Dealer Manager and Solicitation
Agent, the Depositary and Information Agent, the trustee for the
Notes, or any of their respective affiliates, is making any
recommendation as to whether Holders should tender any Notes in
response to the Tender Offer or deliver any consents in response to
the Consent Solicitation. Holders must make their own decision as
to whether to tender any of their Notes or deliver any consents
and, if so, how many Notes to tender and consents to deliver. This
press release is for informational purposes only and does not
constitute an offer to sell, the solicitation of an offer to buy or
the solicitation of tenders or consents with respect to any
security and shall not constitute an offer, solicitation or sale in
any jurisdiction in which such offering, solicitation or sale would
be unlawful. The Tender Offer and Consent Solicitation is being
made solely by means of the Statement. In those jurisdictions where
the securities, blue sky or other laws require any tender offer or
solicitation of consents to be made by a licensed broker or dealer,
the Tender Offer and Consent Solicitation will be deemed to be made
on behalf of the Company by the Dealer Manager and Solicitation
Agent or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
Cautionary Statement on
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of securities laws. You should not place undue reliance on
these statements. Such forward-looking statements include
statements regarding the ability of the Company to satisfy the
financing condition and receive the requisite consents to the
Proposed Amendments. Forward-looking statements include information
concerning our liquidity and our possible or assumed future results
of operations, including descriptions of our business strategies.
These statements often include words such as "believe," "expect,"
"anticipate," "intend," "plan," "estimate," "seek," "will," "may"
or similar expressions. These statements are based on certain
assumptions that we have made in light of our experience in the
industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we
believe are appropriate in these circumstances. As you read this
release, you should understand that these statements are not
guarantees of performance or results. They involve risks,
uncertainties and assumptions. Many factors could affect our actual
financial results and could cause actual results to differ
materially from those expressed in the forward-looking statements.
Some important factors include: our ability to grow our business,
successfully integrate acquisitions, and efficiently manage growth;
our reliance on our key senior management team and local management
personnel; a failure of our back office infrastructure could
adversely impact our ability to manage our operations; changes in
general economic and employment conditions; the impact of the
pandemics, such as COVID-19, and natural disasters; the geographic
concentration of our operations, which make us sensitive to local
regulatory and economic changes; our ability to enter into
favorable contracts with managed care plans; our exposure to the
increased amounts of and collection risks associated with uninsured
accounts and the copay and deductible portions of insured accounts;
current and potential lawsuits or other claims asserted against us;
the challenges posed by the competitive nature of the healthcare
industry, including competition and increasing costs related to
recruiting talented staff and competition hampering our ability to
acquire additional hospitals on favorable terms; potential
acquisitions could be costly, unsuccessful or subject us to
material unexpected liabilities; our failure to adequately upgrade
our facilities with technologically advanced equipment; the
potential impact of a cybersecurity incident or other forms of data
breaches and any resulting litigation, government inquiries, and
damage to our reputation; our ability to attract and retain
qualified management and healthcare professionals, including
physicians and nurses; cost containment efforts and reductions in
reimbursement rates applicable to Medicare and Medicaid programs
including in connection with federal budget sequestration or
changes in budgetary priorities by state and local governments; the
efforts of insurers, healthcare providers, patients and others to
contain healthcare costs, including reductions or adjustments in
reimbursement rates under federal and state healthcare programs;
rankings based on clinical outcomes, cost, quality, patient
satisfaction and other performance indicators; continued growth of
uninsured and "patient due" accounts; ineffective implementation of
our electronic information systems or a failure in such system
could adversely affect our operations; any unfavorable negotiations
with our labor unions, labor disruptions or increased labor costs
and any litigation concerning or with our medical staff; the extent
of distributions to our controlling stockholder; our continued
capital expenditures and other commitments associated with ongoing
acquisitions; the small number of stockholders, our related party
transactions and our controlling stockholder's affiliation with the
company that provides much of our insurance coverage; our
eligibility to participate in the Medicare and Medicaid programs;
existing and future federal and state antitrust regulations; our
pension liabilities and funding obligations; any potential
responsibilities and costs under environmental laws; governmental
regulation of the industry, including Medicare and Medicaid
reimbursement levels as well as construction, acquisition or
expansion of hospitals; our requirement to treat patients with
emergency medical conditions regardless of ability to pay; the
impact from healthcare reform efforts, including legal challenges
to, and efforts to, repeal, replace, or change, the Patient
Protection and Affordable Care Act, as amended; any potential
penalties or required changes following failure to comply with laws
and any impacts from complying with federal and state privacy laws,
including the Health Insurance Portability and Accountability Act
of 1996, as amended; any changes to or discontinuation of
California's Hospital Quality
Assurance Fee Program; failure to implement information systems to
comply with coding requirements; state efforts to regulate the
construction or expansion of healthcare facilities; risks related
to climate change; expectations with respect to environmental,
social and governance-related initiatives; our high degree of
leverage and our ability to incur substantially more debt or
refinance existing debt; and interest rate risk.
In light of these risks, uncertainties and assumptions, the
forward-looking statements contained in this release might not
prove to be accurate and you should not place undue reliance upon
them. All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
the foregoing cautionary statements. All such statements speak only
as of the date made, and we undertake no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise. New risk factors
and uncertainties may emerge from time to time, and it is not
possible for management to predict all risk factors and
uncertainties.
About Prime Healthcare Services,
Inc.
Prime Healthcare is headquartered in Ontario, California and operates 44 hospitals and has
more than 300 outpatient locations. Prime Healthcare provided
approximately 2.6 million patient visits in 2023. It is one of the
nation's leading health systems with nearly 45,000 employees and
affiliated physicians. Fourteen of the Prime Healthcare hospitals
are members of the Prime Healthcare Foundation, a 501(c)(3)
not-for-profit public charity.
Media Contact:
Elizabeth
Nikels / 909-235-4305 enikels@primehealthcare.com
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SOURCE Prime Healthcare Services, Inc.