Vanguard Announces Receipt of Consents

Aug 10, 2004, 00:00 AM by User Not Found
NASHVILLE, Tennessee (August 10, 2004) – Vanguard Health Systems, Inc. (the “Company” or “Vanguard”) announced today the expiration of the consent date and receipt of requisite consents for approximately 99.6% of the principal amount of its outstanding $300 million aggregate principal amount of 9 3/4% Senior Subordinated Notes due 2011 (CUSIP No. 922036AB4) (the “Notes”), as of 5 p.m., New York City time, on August 9, 2004 (the “Consent Date,” as defined in Vanguard’s offer to purchase). The consents were made pursuant to Vanguard’s offer to purchase and consent solicitation statement dated July 27, 2004, and related consent and letter of transmittal (the “Offer to Purchase”), which more fully set forth the terms of the tender offer and consent solicitation.

NASHVILLE, Tennessee (August 10, 2004) – Vanguard Health Systems, Inc. (the “Company” or “Vanguard”) announced today the expiration of the consent date and receipt of requisite consents for approximately 99.6% of the principal amount of its outstanding $300 million aggregate principal amount of 9 3/4% Senior Subordinated Notes due 2011 (CUSIP No. 922036AB4) (the “Notes”), as of 5 p.m., New York City time, on August 9, 2004 (the “Consent Date,” as defined in Vanguard’s offer to purchase). The consents were made pursuant to Vanguard’s offer to purchase and consent solicitation statement dated July 27, 2004, and related consent and letter of transmittal (the “Offer to Purchase”), which more fully set forth the terms of the tender offer and consent solicitation.

As of 5:00 p.m., New York City time, on August 9, 2004, Vanguard had received consents and tenders, not validly withdrawn, for $298,789,000 aggregate principal amount of the Notes.

These consents and tenders may not be validly withdrawn unless Vanguard makes a material change in the terms of the tender offer. Upon completion of the tender offer, holders who tendered their notes prior to 5:00 p.m., New York City time, on August 9, 2004, will receive the tender offer consideration and the consent payment of $20.00 per $1,000 principal amount of Notes tendered.

Vanguard also announced today that it is extending the expiration date of its cash tender offer for any and all of the Notes.

The tender offer has been extended to expire at 11:59 p.m., New York City time, on September 16, 2004, unless further extended or earlier terminated. Any holders who tender their Notes after 5:00 p.m., New York City time, August 9, 2004, and before the expiration date of the tender offer, will receive the tender offer consideration but not the consent payment. The price determination date has been extended to 2:00 p.m., New York City time, on September 2, 2004, unless further extended. The Consent Date and the last day to validly withdraw tendered Notes and to revoke consents, remains unchanged and was 5:00 p.m., New York City time, on August 9, 2004. Holders who tender their Notes will receive accrued and unpaid interest up to, but not including, the applicable payment date in connection with the tender offer.

Vanguard and J.P. Morgan Trust Company, National Association (successor in interest to Bank One Trust Company, N.A.), the trustee under the indenture pursuant to which the Notes were issued (the “Indenture”), have executed a supplemental indenture to the Indenture in order to effect the proposed amendments to the Notes and the Indenture, as provided in the Offer to Purchase. However, the amendments will not become operative with respect to the Notes until the Notes are accepted for purchase pursuant to the terms of the tender offer.

The tender offer and consent solicitation are being made pursuant to the Offer to Purchase, which more fully set forth the terms of the tender offer and consent solicitation. Copies of these documents may be obtained from Global Bondholder Services Corporation, the information agent for the offer, at (866) 804- 2200 (US toll free) and (212) 430-3774 (collect).

The Company has engaged Citigroup Global Markets Inc. and Banc of America Securities LLC to act as the dealer managers and solicitation agents in connection with the tender offer and consent solicitation. Questions regarding the offer may be directed to Citigroup at (800) 558-3745 (US toll-free) and (212) 723-6106 (collect) or Banc of America at (888) 292-0070 (US toll-free) and (704) 388-4813 (collect).

This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consent with respect to any securities. The offer is being made solely by the Offer to Purchase.

About Vanguard Health Systems

Vanguard Health Systems, Inc. owns and operates 16 acute care hospitals and complementary facilities and services in Chicago, Illinois; Phoenix, Arizona; Orange County, California; and San Antonio, Texas. The Company’s strategy is to develop locally branded, comprehensive healthcare delivery networks in urban markets. Vanguard will pursue acquisitions where there are opportunities to partner with leading delivery systems in new urban markets. Upon acquiring a facility or network of facilities, Vanguard implements strategic and operational improvement initiatives, including expanding services, strengthening relationships with physicians and managed care organizations, recruiting new physicians and upgrading information systems and other capital equipment. These strategies improve quality and network coverage in a cost effective and accessible manner for the communities we serve.

This press release contains forward-looking statements within the meaning of the federal securities laws, which are intended to be covered by the safe harbors created thereby. These forward-looking statements include all statements that are not historical statements of fact and those statements regarding the Company’s intent, belief or expectations. Do not rely on any forward-looking statements as such statements are subject to numerous factors, risks and uncertainties that could cause the Company’s actual outcomes, results, performance or achievements to be materially different from those projected. These factors, risks and uncertainties include, among others, the Company’s high degree of leverage; the Company’s ability to incur substantially more debt; Operating and financial restrictions in the Company’s debt agreements; the Company’s ability to successfully implement the Company’s business strategies; the Company’s ability to successfully integrate the Company’s recent and any future acquisitions, including the transactions in connection with which this tender offer is being conducted; the highly competitive nature of the health care industry; governmental regulation of the industry, including Medicare and Medicaid reimbursement levels; pressures to contain costs by managed care organizations and other insurers and the Company’s ability to negotiate acceptable terms with these third party payers; the Company’s ability to attract and retain qualified management and health care professionals, including physicians and nurses; potential federal or state reform of health care; future governmental investigations; costs associated with newly enacted HIPAA regulations and other management information systems integrations; the availability of capital to fund the Company’s corporate growth strategy; potential lawsuits or other claims asserted against the Company; the Company’s ability to maintain or increase membership and control costs of its managed health care plans; changes in general economic conditions; the Company’s exposure to the increased amounts of and collection risks associated with uninsured accounts and the co-pay and deductible portions of insured accounts; the impact of changes to the Company’s charity care and self-pay discounting policies; increased cost of professional and general liability insurance and increases in the quantity and severity of professional liability claims; the Company’s ability to maintain and increase patient volumes and control the costs of providing services, including salaries and benefits, supplies and bad debts; the Company’s failure to comply, or allegations of its failure to comply, with applicable laws and regulations; the geographic concentration of the Company’s operations; technological and pharmaceutical improvements that increase the cost of providing, or reduce the demand for, health care services; potential substantial liabilities arising from unfavorable retrospective reviews by governmental or other payers of the medical necessity of medical procedures performed at the Company’s hospitals; lost future revenues from payer contract terminations resulting from their unfavorable retrospective reviews of the medical necessity of medical procedures performed at the Company’s hospitals; and those factors, risks and uncertainties detailed in the Company’s filings from time to time with the Securities and Exchange Commission, including, among others, the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.

Although the Company believes that the assumptions underlying the forward-looking statements contained in this press release are reasonable, any of these assumptions could prove to be inaccurate, and, therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, you should not regard the inclusion of such information as a representation by the Company that its objectives and plans anticipated by the forward-looking statements will occur or be achieved, or if any of them do, what impact they will have on the Company’s results of operations or financial condition. The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.