HCA Cuts Price For Its Planned Offering

Hospital chain operator HCA Inc. expects its initial public offering to price at $27 to $30 a share, or 19 percent less than originally planned, a source familiar with the situation told Reuters.

The details are not public and the source declined to be named. Bain Capital and Kohlberg Kravis Roberts & Co., among the owners of HCA, declined to comment.

The company and selling shareholders plan to sell 124 million shares for $27 to $30 each, raising up to $3.7 billion. In May, HCA filed to raise up to $4.6 billion.

Of the 124 million shares to be sold, HCA will sell 87.7 million and current shareholders will sell 36.3 million. Most of the shares to be sold by shareholders will come from the private equity owners.

The company is expected to price the offering on March 9, the source said.

HCA, which operates more than 160 hospitals in the United States and England, was taken private in November 2006 in a $21 billion deal that included Bain, KKR, Bank of America Corp., Citigroup Inc. and HCA’s founder.

Since May, HCA has paid more than $4 billion in dividends to its owners, removing some of the immediate financial pressure for an IPO.

Underwriters on the IPO are being led by Bank of America Merrill Lynch, Citi and JPMorgan. The shares are expected to trade on the New York Stock Exchange under the symbol “HCA.”

The hospital operator is the most recent in a slew of buyout-backed offerings to come to market in the United States.

Dutch chipmaker NXP Semiconductors raised $476 million in August; consumer measurement company Nielsen Holdings raised $1.6 billion in January and Florida-based BankUnited raised $783 million; and pipeline company Kinder Morgan raised $2.9 billion in February.

Toys R Us has filed with U.S. regulators to raise up to $800 million but has yet to set terms for its IPO or choose a debut date.

Private equity firms are eager to begin the process of exiting portfolio companies bought at the height of the buyout boom of 2005 to 2007. The window for such exits was closed during the financial crisis.

Clare Baldwin is a Reuters journalist in New York.