It wont take much to make the third time the charm for Memorial Health Services, Huntington Beach, Calif. Crossing the finish line on a sale of
223-bed Anaheim (Calif.) Memorial Medical Center would seem to suffice.
The not-for-profit system is seeking bids for the third time on the hospital because financing fell through for an agreement announced in November 2007. For-profit Integrated Healthcare Holdings, Santa Ana, Calif., won the second round of bidding on the hospital with an offer of $68 million in cash and a capital commitment of $28.7 million.
Integrated struggled with a split among its board members for much of 2007, stalling a needed debt refinancing. Integrated technically was in default on some of its loan agreements, but its lenders agreed not to pursue the default remedies. In May 2007, the company sued a major shareholder, Orange County Physicians Investment Network, and three directors who were aligned with it, prompting a countersuit. The cases eventually were solved when C. Robert Jameson, a former Orange County (Calif.) Superior Court judge, was added to the board and broke a 3-3 deadlock among its members. Once that was completed, Integrated was able to refinance its debt in September.
Bruce Mogel, president and chief executive officer of Integrated, said the companys financing is solidly in place. The company, however, needed separate financing to buy Anaheim Memorial and the lenders asked at the last minute for additional information that Integrated could not provide in time, he said. Integrated plans to bid in the third round, he added.
Even though Integrated was not able to complete financing of its offer for Anaheim Memorial, the four-hospital company will be eligible to bid again, the Memorial system said. Four other bidders have been invited to make an offer for the hospital, according to Memorial, including Prime Healthcare Services, Victorville, Calif., which won the first round of bidding.
The third round of bidding should be completed in March, according to the hospital.