Columbia/HCA Healthcare Corp. has thrust itself back into the hunt to acquire beleaguered 202-bed Cape Coral (Fla.) Hospital.
Cape Coral Hospital in April agreed in principle to an asset sale to Lee Memorial Health System, Fort Myers, Fla. (April 8, p. 14). But with negotiations dragging on into the third month, Columbia stepped in and made an offer, officials revealed last week. The amount of the offer wasn't disclosed.
A Lee Memorial spokeswoman said the Cape Coral board was scheduled to review the proposals in a meeting late last week.
Cape Coral officials were unavailable for comment.
Beyond a potentially lucrative offer from Columbia, Cape Coral board members have good and bad news about the possibility of selling to the 340-hospital, for-profit chain.
The good news is Columbia has won preliminary approval from the Federal Trade Commission to take over Cape Coral. The bad news is Cape Coral also has been notified by the Florida attorney general's office that it would challenge a Columbia acquisition.
Columbia's offer is the latest chapter in Cape Coral's two-year ordeal. Since 1994, three former executives were fired for allegedly misspending hospital assets, and deals fell apart to sell the facility to Lee Memorial and Health Management Associates of Naples, Fla.
In 1994, the FTC challenged a proposed merger between Cape Coral and Lee Memorial. During federal court proceedings, Cape Coral pulled out of the deal to seek other offers. Ultimately, however, the two not-for-profit hospitals won the right to merge.
Cape Coral, which owes nearly $130 million in bond debt and interest, has lost more than $35 million during the past two years. It's also facing a $10 million fine from the Internal Revenue Service for improperly spending tax-exempt-bond proceeds.
Lee Memorial has offered $140 million for Cape Coral. It also has agreed to pay the legal costs of 17 current and former board members who have been sued for several reasons, including issues surrounding the firing of the three former executives.