M&A roundup: Ardent Health purchase of bankrupt Forum hits a snag

A subsidiary of privately owned Nashville, Tenn.-based Ardent Health Services wants to buy the assets of bankrupt Forum Health in Youngstown, Ohio, for $69.8 million, reports MedCity News. Forum filed a motion on June 10 asking the U.S. Bankruptcy Court to approve the deal, adds the Business Journal Daily. However, Forum's creditors are worried that Ardent "was able to take months to negotiate changes to collective-bargaining agreements with unions representing Forum Health's workers"--giving the company an unfair advantage over other potential bidders in a proposed auction, reports the Dow Jones Daily Bankruptcy Review in the Wall Street Journal. The creditors (MBIA Insurance Corp., U.S. Bank and Fifth Third Bank) have asked Forum to "remedy the defects that will prevent a fair and open auction" by a June 22 hearing on the proposed sale.

Forum is selling Northside Medical Center, Trumbull Memorial Hospital, Hillside Rehabilitation Hospital, its physician practice, two diagnostic and imaging centers, and five laboratories. Ardent has agreed to keep the hospitals open and invest $70 million over five years to renovate the facilities.

In other merger news, Community Hospital of Long Beach (Calif.) is in merger talks with Long Beach Memorial Medical Center, part of the not-for-profit MemorialCare Health System, reports the Gazettes Town News. Community Hospital was closed 10 years ago by corporate owner Catholic HealthCare West and reopened in June 2001 as an independent not-for-profit serving east Long Beach. Community Hospital is seeking the merger to ensure the facility stays open long-term, says board Chair Nancy Myers. "This is not a fire sale ... We're still able to function, still able to pay our bills. The watchword in these talks has been to find how best to insure continued access to quality health care." Due diligence is expected to take a year to complete. However, Memorial will use a management services agreement to take over operations soon.

To learn more:
- read this MedCity News article
- read this Business Journal Daily report
- read the Dow Jones Daily Bankruptcy Review report in the Wall Street Journal
- read the Gazettes Town News article
- read this Press-Telegram report

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