Valued at about $3.5 billion, the initial public offering of the hospital company HCA Holdings is expected to be the largest-ever new domestic stock issue sold by private equity firms.
But in recent weeks, the HCA offering’s size was pared to $500 million after some major shareholders, citing confidence in the company’s long-term market prospects, opted to sell fewer shares than planned, say people familiar with the matter.
Members of the Frist family, which founded HCA in 1968 and now own nearly 19 percent of it, had originally planned to sell a chunk of their holdings, say people familiar with the offering.
But in recent weeks, the family members changed course, these people said. A securities filing issued Tuesday morning suggests that the family will now sell less than 1 percent of its 18.8 percent stake in HCA.
The Frist family’s stock is held by Thomas Frist III who runs the Nashville, Tenn. investment firm Frist Capital, and his brother William First, also a principal at Frist Capital. Both siblings, whose father and grandfather founded HCA, are directors of the company.
A call placed to Frist Capital for comment was not returned, and an HCA spokesman declined to comment on the family’s share sale.
HCA, the world’s largest private hospital operator, has traded publicly before. But in 2006, it was taken private by Bain Capital Partners, Kohlberg Kravis Roberts, and Merrill Lynch Global Private Equity in a nearly $32 billion leveraged buyout—the largest of its kind ever.
With HCA’s sponsors seeking an exit strategy, the company had planned to go public as early as last summer. But market conditions were inhospitable, and HCA was forced to wait.
HCA’s road show kicks off with meetings today at the New York offices of Bank of America, J.P. Morgan, and Citigroup, who are the chief underwriters of the IPO. Company management will travel to Europe later this week, then return to the U.S. next week for a slew of meetings with domestic institutional investors.
IPO pricing, which is now expected to fall between $27 and $30 per share, is expected to occur March 9, say the people familiar with the offering.
Watch Kate Kelly weekdays at Noon ET on CNBC's "The Strategy Session."
*This post has been updated.
Questions? Comments? Write to firstname.lastname@example.org