Tenet Healthcare Corp. will sell convertible bonds that are exchangeable for its 13% stake in Vencor, a Louisville, Ky.-based long-term-care company. Santa Monica, Calif.-based Tenet filed a registration statement with the Securities and Exchange Commission last week for the proposed offering of exchangeable subordinated notes due in 2007. Earlier this month, Vencor paid Tenet $93 million in cash and 8.3 million common shares for its stake in the nursing home chain Hillhaven Corp. The shares are worth about $260 million. To monetize that stake, Tenet will sell bonds that can be converted into Vencor stock in 1997. The interest rate for the bonds and the amount raised through the offering have not been determined.
Detroit Medical Center will scrap most of its hospital boards and hospital presidents and restructure to strengthen its regional focus and coordinate clinical services among its seven hospitals, rehabilitation institute and outpatient services. Under a plan unveiled last week, three regional advisory boards and four clinical service advisory boards will be established by Jan. 1, 1996. Six hospital presidents have been given new jobs, and one retired. Only Detroit Receiving Hospital, which is a former municipal hospital, will keep its board because of legal obligations, said DMC spokeswoman Shari Cohen. The 2,500-bed system is affiliated with Wayne State University in Detroit and has 2,400 affiliated medical staff members. It had net patient service revenues of $1.2 billion in 1994. The management changes will be implemented in the next 90 days.
Atlanta-based Allegiant Physician Services, a provider of physician management services, has agreed to sell its troubled pain treatment operations to the senior management of that division for about $18 million. The purchase is expected to be a combination of cash, promissory notes and assumption of liabilities. Allegiant may yield future tax benefits from losses in the division, which were estimated at $16.9 million, it said. For the nine months ended Sept. 30, the company reported a net loss of $338,000, or 2 cents per share, on revenues of $45.8 million. That compares with net income of $1.7 million, or 6 cents per share, on revenues of $48.8 million in the year-ago period. The company blamed the loss on an unusually high summer fall-off in surgical procedures at hospitals combined with investment spending in its strategic business segments.
Sister Irene Kraus, former chairwoman of the American Hospital Association, has been reassigned from her job as president and chief executive officer of 391-bed Sacred Heart Hospital of Pensacola (Fla.). Kraus, 71, will become administrator of the Daughters of Charity provincial house in Emmitsburg, Md. Sacred Heart is sponsored by Daughters of Charity National Health System. Kraus was CEO at the national system for six years before taking over at Sacred Heart in 1992. Patrick Madden, Sacred Heart's executive vice president, has been appointed to succeed Kraus. Madden, 51, becomes Sacred Heart's first lay administrator in its 80-year history.
Thomas J. May, 47, will take over at the end of the year as chief executive officer of four-hospital Good Samaritan Health System of San Jose, Calif. May, is president of the hospital division of Burbank, Calif.-based UniHealth. Current Good Samaritan CEO Michael Guthrie will remain at his post until Dec. 31, the target closing date of the hospital's sale to Columbia/HCA Healthcare Corp. Guthrie's future plans are unknown, but it was his decision to leave Good Samaritan, a hospital spokeswoman said.
Healthcare supplier Johnson & Johnson launched an unsolicited cash tender offer of $1.6 billion, or $100 per share, for Cordis Corp. but promised to sweeten its offer by $100 million, or $5 per share, if Cordis agreed to a stock-for-stock merger. Earlier this year, Cordis refused to negotiate, according to Johnson & Johnson. Cordis said its executives and board now would evaluate the proposal. Miami-based Cordis is a leading manufacturer of angioplasty devices, such as balloon catheters. It earned $37 million on sales of $337 million in its 1994 fiscal year. New Brunswick, N.J.-based Johnson & Johnson makes the only stent approved by the Food and Drug Administration to reduce restenosis following angioplasty. The company earned $2 billion on sales of $15 billion in its 1994 fiscal year. It plans to merge its cardiac operations into Cordis if the acquisition is completed.