This case includes the problems related to the buyout process. It includes the role of the equity, participants, shareholders, and the estimate of the buyout in monetary terms. The case is centered on HCA and three equity firms, privately held which are the main subjects of the buyout of the company.
1. Is HCAs Board facing potential internal conflicts of interest? How are they managing them? Is the process adopted by HCAs Board the most appropriate to maximize shareholder value in this transaction? What would you, as ML, advise this Board to do different?
2. Could ML be engaged by the private equity trio to become lead underwriter of the $5.7 billion in new notes to be issued after the LBO? What are the potential conflicts of interest? What risks could ML be facing? What criteria should the private equity trio employ to select the most appropriate bank(s) for that role?