HCA’s planned IPO on the rocks

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In May — right in the wake of the infamous market “flash crash” — Hospital Corporation of America (HCA) set plans for an IPO.

This was big news not only because of the size of the offering, expected to raise up to $4.6 billion, but also given that HCA had previously gone private a few years ago in a record-setting $33 billion private equity deal.

Of course, when the market went nuts for a day and billions in value was obliterated, it wasn’t exactly a great time to charge ahead, so HCA cooled its heels for a while.  And then some more, and some more.

Now, in mid-October, it’s not clear whether HCA’s IPO will go forward this year or not.   HCA has filed the IPO papers, but it hasn’t taken other key steps, such as filing docs listing what price it will set for its shares.

True, the stock market climate has improved dramatically since May, with companies posting their best September in more than 70 years.  On the other hand, with companies like Community Health and LifePoint buying back stock — and Tenet repurchasing debt — it’s not clear if hospital companies are tardy to the party.

Given question marks hanging over the hospital industry, it might be wise for HCA to go ahead and hold off on pulling the trigger, analyst Michael “Trey” Crabb told The Tennessean. He doesn’t expect to see HCA go to market until the first quarter of 2011, when Q4 ’10 results are in and November mid-term elections are past.

Both will give investors a clearer picture of HCA’s prospects, he notes. For example, when a minority party takes control of Congress, stocks typically rise 13 percent.  That could give the planned IPO a boost after the mid-terms.

All that being said, HCA isn’t a hot, young, idea-driven company with low debt — the ideal IPO candidate, according to IPOScoop.com — but rather, a sprawling, conservative giant with a ton of deb on its tail.

In fact, if the elections don’t go Republican, one wonders whether HCA will pull the ripcord on the IPO at all.

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