Two not-for-profit systems have decided not to pursue proposed joint venture deals with Triad Hospitals,Plano , Texas , the systems said separately. Baptist Health System of East Tennessee, Knoxville , said its board has decided against waiting for the delay in closing its deal Triad proposed and was dissolving the deal instead. That deal was originally scheduled to close Nov. 1, but Triad sought to push it back at least two months, and Baptist Knoxville initially agreed. In its most recent memorandum to employees about the deal, Baptist Knoxville said the delay "is not in the best interest of Baptist, its physicians and employees." The four-hospital system said it is reopening talks with other interested suitors. Separately, Shannon Health, San Angelo , Texas , said it was ending its pursuit of a joint venture deal with Triad that would have combined the operations of the two private hospitals in San Angelo . The parties agreed to a letter of intent last month. Shannon Health said the lengthy time it would take to complete the deal would result in a lot of uncertainty that would fuel employee attrition, hurting its ability to provide care.
Triad spokeswoman Pat Ball said neither decision is related to the company’s third-quarter earnings shortfall or Triad’s expectations that it will reduce capital expenditures in 2006 and possibly 2007. Triad and Baptist Knoxville had discussions about whether the deal would be completed soon enough to satisfy Baptist Knoxville before the earnings release, which was Oct. 30, Ball said. Regarding Shannon Health, Ball said many deals are dissolved during the letter-of-intent stage, during which time either party can scuttle the deal for any reason. A major Triad shareholder accused Triad last week of being overly aggressive in its acquisition and facility-expansion spending, and called on the company to shift that spending to stock buybacks to boost returns to investors. Triad owns or operates 52 hospitals and 12 ambulatory surgery centers in 17 states.