Premier plans to settle October Class B unit exchange with cash, stock
Premier announced its audit and compliance committee and board of directors authorized the use of up to $100M in cash to partially settle its upcoming member-owner exchange of Class B common units of Premier Healthcare Alliance, L.P. on October 31, 2016. Historically, Premier has settled each quarterly exchange solely with Class A common stock. However, as part of the exchange process, the company has the right to settle the exchange of Class B common units in either cash, Class A common stock, or a combination thereof. For the October 31st exchange, 46 of the company's 171 member owners have indicated that they plan to exchange approximately 5.0 million Class B common units. Each exchanging member owner also has the right to rescind its decision leading up to the exchange date. Any Class B common units not settled in cash will be exchanged for Class A common shares on a one-for-one basis, and be eligible to trade into the market after exchange. As a result of its decision to settle part of the exchange for cash, the company does not plan to conduct a company-directed offering, as it has voluntarily done in the past two years following the October 31st exchange.