The NY Times reports that HCA (HCA) was close to a deal last night to sell itself to a consortium of private equity investors for about $21bn. The investors would also take on about $10.6bn of HCA’s debt, making the deal the largest leveraged buyout in history. The buyout group is led by Thomas Frist Sr., the founder of HCA, and his son, Thomas F. Frist Jr., who are, respectively, the father and brother of Senator Bill Frist, the majority leader. The other investors are Bain Capital, Kohlberg Kravis Roberts & Co and Merrill Lynch's private equity arm. With a value of $31.6 billion the deal would be even larger than Kohlberg Kravis Roberts’ $25 billion acquisition of RJR Nabisco in 1989.
The Wall Street Journal reports, citing ppl familiar with the matter, that AMD (AMD) plans to pay about $5.4 billion to buy ATI Technologies (ATYT) in what would be one of the biggest-ever acquisitions of a semiconductor maker. The co's were in late stages of negotiations Sun, with a deal likely to be announced as early as Monday morning. ATI had a mkt cap of about $4.2bn as of Fri. The consideration from AMD is expected to be mostly in cash, with the remainder comprised of AMD shares.
THe WSJ's "Tracking the Numbers" column discusses Bunge (BG), highlighting co's low-quality earnings. The co's financial statements are known for their complexity and have often carried one-time items that benefit the bottom line, causing some analysts to question the quality and sustainability of the earnings. Meanwhile, Bunge's free cash flow has been negative for 3 of the past 4 years. Bunge has a "black-box perception" in financial mkts, John McMillin, of Prudential, said during Bunge's Q1 earnings conference call earlier this year. He later added in a research note on the co: "We know a low-quality earnings stream when we see one."
Deerfield Mgmt, a hedge fund, has been making healthy purchases of Par Pharmaceutical's (PRX) stock, even as the drug maker's shares appear far from the path to recovery. Deerfield, which specializes in the health-care sector, disclosed that its holdings now exceeded 10% of Par's outstanding shares, up from a 5% stake the fund held in May.