After scrapping its proposed 50-50 joint venture with Columbia/HCA Healthcare Corp. late last week, San Diego-based Sharp HealthCare is back to square one.
In a special meeting, Sharp's board decided to terminate its controversial joint venture with the Nashville-based investor-owned healthcare company, which has been negotiating since December 1995 to purchase half of the not-for-profit, four-hospital system's assets for more than $200 million.
"Both the board and management of Sharp HealthCare believe this action is in the best interest of the organization, our employees, physicians, volunteers and the communities we serve," said Michael Murphy, Sharp's president and chief executive officer.
The rejection of the deal came after several problems arose, including concerns voiced by the California attorney general, who feared Columbia has undervalued Sharp and would underfund a new foundation.
"We now believe that issues regarding the proposed partnership, including the 50-50 structure, the question of valuation, and the attorney general's interpretation of trust documents and articles of incorporation have created legitimate differences of opinion with respect to the completion of the partnership," Murphy said.
Sharp now says it will start over, retaining an independent counsel to examine advice it received from its current legal counsel.