Triad Buyout

Triad Hospitals Inc (TRI)
$4.4B Buyout Terminated - Competing Offer

Summary

Buyout of hospital chain

$50.25 per TRI share; $4.4B total

$6.4B including assumed debt

TRI news - stock chart

Deal follows $21B HCA buyout
Triad was spun-out of HCA in 1999

Announced 2.05.07

Terminated 3.19.07

TRI accepts competing offer from Community Health

$54.00 per TRI share; $5.1B total

$6.8B including assumed debt
CYH news - stock chart

Joint press release

TRI paid termination fee to buyout group

40 day go shop period ended on 3.16.07
Proxy statement disclosure
Break-up fee appears limited to $20mm, not $120mm
Proxy statement disclosure

Background of the merger

Club Deal

Consortium buyout by

CCMP Capital Advisors
GS Capital Partners Goldman Sachs

Advisors

Financial

TRI: Goldman / JP Morgan / Citigroup
Special Committee : Lehman Brothers

Legal

TRI : Dewey Ballantine
Special Committee : Baker Botts
Sponsors: O'Melveny & Myers

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I Definitions

1.1 Definitions
1.2 Terms Generally

Article II The Merger

2.1 The Merger
2.2 Closing
2.3 Effective Time
2.4 Effects of the Merger
2.5 Organizational Documents
2.6 Directors and Officers of Surviving Corporation

Article III Effect of the Merger on the Capital Stock of the
Constituent Corporations

3.1 Conversion of Securities
3.2 Payment of Cash for Merger Shares
3.3 Treatment of Options and Other Awards

Article IV Company Reps

4.1 Corporate Existence and Power
4.2 Corporate Authorization
4.3 Governmental Authorization
4.4 Non-contravention
4.5 Capitalization
4.6 Company Subsidiaries and Joint Ventures
4.7 Reports and Financial Statements
4.8 Undisclosed Liabilities
4.9 Disclosure Documents
4.10 Absence of Certain Changes or Events
4.11 Litigation
4.12 Contracts
4.13 Taxes
4.14 ERISA
4.15 Real Property
4.16 Compliance with Laws
4.17 Finders Fees
4.18 Opinion of Financial Advisors
4.19 Affiliate Transactions
4.20 Rights Agreement; Anti-takeover Provisions

Article V Panthera Partners Reps

5.1 Corporate Existence and Power
5.2 Corporate Authorization
5.3 Governmental Authorization
5.4 Non-contravention
5.5 Disclosure Documents
5.6 Finders Fees
5.7 Financing
5.8 Guarantees
5.9 Operations of Panthera Partners, Panthera Holdco and
Merger Sub
5.10 Litigation
5.11 Solvency
5.12 Debt Financing Commitment Conditions

Article VI Conduct of Business Pending the Merger

6.1 Company and Subsidiaries
6.2 Parent and Merger Sub
6.3 No Control of Other Partys Business

Article VII Additional Agreements

7.1 Stockholder Meeting; Proxy Material
7.2 Reasonable Best Efforts
7.3 Access to Information
7.4 Solicitation
7.5 Director and Officer Liability
7.6 Takeover Statutes
7.7 Public Announcements
7.8 Notice of Current Events
7.9 Employee Matters
7.10 Financing
7.11 Actions with Respect to Existing Debt
7.12 Stock Exchange Listing
7.13 Insurance Matters
7.14 Section 16(b)
7.15 Resignation of Directors
7.16 Shareholder Litigation
7.17 Conveyance Taxes

Article VIII Conditions to the Merger

8.1 Each Party
8.2 Parent and Merger Sub
8.3 Company

Article IX Termination

9.1 Termination
9.2 Termination Fee
9.3 Effect of Termination

Article X Miscellaneous

10.1 Notices
10.2 Representations and Warranties
10.3 Expenses
10.4 Amendment
10.5 Waiver
10.6 Successors and Assigns
10.7 Governing Law
10.8 Counterparts; Effectiveness; Third Party Beneficiaries
10.9 Severability
10.10 Entire Agreement
10.11 Remedies
10.12 Jurisdiction
10.13 Authorship

Proxy Solicitation

Shareholder meeting

Not yet scheduled

Proxy statements

Definitive proxy 5.08.07
Preliminary 3.30.07 Community Health

Table of contents

Preliminary 3.16.07

Deal Protection

No shop covenant

Subject to 40 day go shop provision

Merger Agreement § 7.4

Proxy statement disclosure

Break-up fees

$120mm after "go shop" period;
$20mm (plus up to $20mm in expenses)
if a proposal is made during "go shop" period

Merger Agreement § 9.2

Proxy statement disclosure $15mm Triad

Regulatory Approvals

HSR Act

Merger agreement §7.2
Proxy statement disclosure

Fairness Opinion

Lehman Brothers fairness opinion

Proxy statement disclosure

Tax Matters

Disclosure

Proxy statement disclosure

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