After months of aggressive propositions to and direct flirtations with its rival's shareholders, Invacare has halted its hostile takeover of Marietta, Ga.-based Healthdyne Technologies, a home medical device company (May 5, p. 50). Invacare sold its 600,000 Healthdyne shares last week after its all-cash offer of $15 per share, or $190 million, expired Aug. 1. Since January, Invacare, which had annual revenues of about $700 million in 1996, tried to acquire Healthdyne in a quest to become a one-stop-shopping home-care company. It initially offered $12 per share but reluctantly upped that offer several times to the final price of $15. It also recently attempted to gain control of Healthdyne's board but failed. A. Malachi Mixon III, Invacare chairman and chief executive officer, said: "We continue to be interested in acquiring Healthdyne, but we cannot wait around idly." He added that Invacare will monitor Healthdyne's performance, including whether it finds a partner with a better offer. If shareholders are not satisfied with offers from other companies or are not happy with future company earnings, only 10% of owned shares are required to call a special meeting to review selling the company.
The boards of Buffalo (N.Y.) General Health System, Children's Hospital of Buffalo and Buffalo's Millard Fillmore Health System approved a definitive merger agreement. The document seals the hospitals' three-way merger, which the Federal Trade Commission recently cleared. The combined organization, called CGF Health System, awaits approvals from the health department on its certificate-of-need application and from the state attorney general (May 19, p. 8).
Philadelphia-based Cigna Corp. has completed its acquisition of Healthsource, based in Hookset, N.H., for about $1.7 billion in cash and assumed debt. The merger expands Cigna's markets and enhances its ability to sell on a retail level (June 30, p. 16). Cigna also has signed a definitive agreement to sell its individual life insurance, life brokerage and annuity businesses to Lincoln National Corp. for approximately $1.4 billion. That deal is expected to close by year-end. According to Moody's Investors Service, the sale will give Cigna as much as $1.3 billion in capital for internal growth and acquisitions. Analysts at Standard & Poor's Corp. expect Cigna will continue to expand its healthcare business, which will account for 53% of its total operating income once the transaction is complete.
California regulators have approved merging the operations of FHP California into PacifiCare of California. The plans will operate under one license. While the state Department of Corporations approved Cypress, Calif.-based PacifiCare Health Systems' acquisition of FHP International Corp. in February, the plans in California have been operating separately. Plans in Arizona, Colorado, Texas and Utah already have been combined (Feb. 24, p. 22).
Brown Memorial Hospital in Conneaut, Ohio, became the fourth community hospital to join University Hospitals Health System, led by University Hospitals of Cleveland. UHHS will appoint three of the seven board members of the 86-bed private, not-for-profit hospital (May 26, p. 4).
Rhode Island's attorney general said last week the federal investigation resulting in indictments of three Columbia/HCA Healthcare Corp. officials could broaden his office's review of Columbia's proposed $51.1 million buyout of Roger Williams Medical Center in Providence. "It's safe to say that I have concerns about where that investigation is going," Attorney General Jeffery Pine said. He urged Roger Williams trustees to "take a good, hard look" at the proposal. Pine could object in court to the transfer of millions of dollars of hospital endowment and other charitable funds after the sale. While Pine has been reviewing whether a not-for-profit community hospital like Roger Williams should be acquired by a for-profit company, he said his concern has shifted to whether Columbia is making profits legally. The Roger Williams deal has been stalled since the Rhode Island General Assembly last month overrode Gov. Lincoln Almond's veto of a new law regarded as one of the nation's strictest hospital regulation measures (July 21, p. 2).