<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
___________________
August 16, 1996
(Date of Report; Date of Earliest Event Reported)
CHAMPION HEALTHCARE CORPORATION
(Exact Name of Registrant as specified in its Charter)
Delaware 0-11851 59-2283872
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
515 W. Greens Road, Suite 800, Houston, Texas 77067
(Address of Principal Executive Offices) (Zip Code)
(713) 583-5491
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE> 2
Items 1-4. Not Applicable.
Item 5. Other Events.
Filed as Exhibit 99.1 hereto is the joint press release, dated
August 20, 1996, of Paracelsus Healthcare Corporation, a California
corporation ("Paracelsus") and Champion Healthcare Corporation, a
California corporation (the "Registrant"), announcing, among other things,
consummation of the merger of the Registrant with a wholly owned subsidiary of
Paracelsus pursuant to the Amended and Restated Agreement and Plan of
Merger, dated as of May 29, 1996, by and among the Registrant, Paracelsus
and PC Merger Sub, Inc., a Delaware corporation ("the Merger Agreement"),
on August 16, 1996.
Item 6. Not Applicable.
Item 7. Financial Statements
Pro Forma Financial Information and Exhibits.
(a)-(b) Not Applicable.
(c) Exhibits Required by Item 601 of Regulation S-K
99.1. Joint Press Release, dated August 20, 1996 of Paracelsus
and the Registrant
Item 8. Not Applicable.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: August 20, 1996
CHAMPION HEALTHCARE CORPORATION
By /s/ James G. VanDevender
James G. VanDevender
Executive Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
99.1. Joint Press Release, dated August 20, 1996 of Paracelsus
and the Registrant
<PAGE> 1
Exhibit 99.1
JOINT PRESS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Mr. Robert Joyner
Senior Vice President
and General Counsel
or
Ms. Deborah Frankovich
Vice President
and Treasurer
713-873-6623
PARACELSUS HEALTHCARE AND CHAMPION HEALTHCARE
COMPLETES MERGER TO CREATE THE SIXTH LARGEST
ACUTE CARE HOSPITAL COMPANY
HOUSTON, Texas, (August 20, 1996) -- Paracelsus Healthcare
Corporation, Pasadena, California (NYSE:PLS) and Champion Healthcare
Corporation, Houston, Texas (NYSE: CHC) announced today that on August 16,
1996 they have consummated a merger pursuant to which Champion has become a
wholly owned subsidiary of Paracelsus.
As a result of the merger, each outstanding share of Champion Common Stock
was converted into one share of Paracelsus Common Stock and each outstanding
share of Champion Preferred Stock was converted into two shares of Paracelsus
Common Stock. In the merger, a total of 19,761,675 shares of Paracelsus Common
Stock were issued to the holders of outstanding shares of Champion Common Stock
and Champion Preferred Stock. Immediately after the merger, Park Hospital GmbH,
a German corporation wholly owned by Dr. Manfred George Krukemeyer (who
previously was the sole shareholder of Paracelsus), will own 29,771,742 shares
of the Paracelsus Common Stock. Following completion of the merger and the
concurrent public offering of 5,200,000 shares of Paracelsus Common Stock,
Paracelsus had 54,733,417 shares of common stock outstanding.
<PAGE> 2
After the merger, Dr. Krukemeyer remains as Chairman of
Paracelsus and Mr. R.J. Messenger will become Vice Chairman and remains as
Chief Executive Officer of Paracelsus. Mr. Charles R. Miller will become a
member of the Board of Paracelsus and the President and Chief Operating
Officer, with direct responsibility for all of Paracelsus' operations. Mr.
James G. VanDevender will become a member of the Board of Paracelsus and
Executive Vice President and Chief Financial Officer. Mr. Ronald R.
Patterson will become Executive Vice President and President, Healthcare
Operations.
Concurrently with the merger, Paracelsus established a new senior
credit facility in an amount of $400 million and Champion repurchased
approximately $94.3 million in aggregate principal amount of its
outstanding Series D and Series E Senior Subordinated Notes. BA
Securities acted as arranger for the new senior credit facility, and
Bank of America Trust and Savings Association acted as Agent.
Additionally, Banque Paribas acted as Documentation Agent, NationsBank of
Texas, N.A. acted as Managing Agent and Credit Lyonnaise New York Branch
and Toronto-Dominion (Texas) Incorporated acted as Co-Agents.
Paracelsus also consummated, concurrently with the merger, a public
offering of 5,200,000 shares of Paracelsus Common Stock with net proceeds of
$41.5 million to Paracelsus and a public offering of an aggregate principal
amount of $325.0 million in 10% Senior Subordinated Notes due 2006. Donaldson,
Lufkin & Jenrette Securities Corporation acted as the lead underwriter in the
equity and debt offerings. In addition, on July 26, 1996, Paracelsus commenced a
tender offer to purchase up to $75.0 million aggregate principal amount of its
outstanding 9 7/8% Senior Subordinated Notes due 2003.
At the time of the merger, Park Hospital entered into a Shareholder
Agreement that imposes on Park Hospital certain "standstill" provisions;
transfer restrictions with respect to Paracelsus voting securities;
limitations on acquiring more than certain levels of the total voting power
of Paracelsus; and an obligation to sell in, tender into and vote in favor
of certain acquisition proposals involving Paracelsus. The Shareholder
Agreement also provides Park Hospital with the right to designate four of
the nine nominees to the Paracelsus Board and a right of first refusal in
connection with certain acquisition proposals.
Concurrently with the merger, the Board of Paracelsus adopted a
Shareholder Protection Rights Plan and declared a dividend of one Right on
each outstanding share of Paracelsus Common Stock. The dividend was paid
on August 16, 1996 to Park Hospital, the sole shareholder of record on
August 15, 1996. In addition, all shares of Paracelsus Common Stock issued
in the merger and in the equity offering were accompanied by a
corresponding Right.
"We believe that this merger represents a unique opportunity to enhance
shareholder value by capturing the synergies available from combining our
companies. Going forward our efforts will be focused on margin improvement,
revenue growth in existing markets and adding value to the delivery of
healthcare through our proprietary programs for assuring the highest quality of
clinical care and customer service in our hosptials. We will also capitalize on
the growing number of attractive acquisiton opportunities for expanding into
new target markets."
<PAGE> 3
"As a result of this merger, Paracelsus has become the sixth largest
acute care hospital company in the United States, with 22 of the 31
hospitals owned or operated by the company located in markets where we are
a preeminent provider. By combining the companies to produce a larger
public company, completing debt and equity offerings, and closing our credit
facility refinancing, we now have a stronger balance sheet and improved
access to capital as well as greater visibility and financial resources to
compete more effectively."
Paracelsus Healthcare Corporation, a public company listed on the New
York Stock Exchange, was founded in 1981 and is headquartered in Houston,
Texas. Including hospital partnerships, Paracelsus presently owns or
operates, 31 hospitals and four skilled nursing facilities in eleven states,
with a total of 3,477 beds.