Public officials in Miami have missed a key contract deadline and potentially torpedoed a $1.1 billion offer to purchase the publicly run Jackson Health Care System and take its $500 million in liabilities off taxpayers' books.
Jackson Health Care deal stalls
Steward Health Care System, a private-equity backed health system based in Boston, had offered to assume Jackson's existing debt and invest roughly $600 million over a period of years in the 1,765-bed system. The offer came only three months after Steward completed a similar $895 million transaction to take over the existing debt and commit to future expansion of Boston's six-hospital Caritas Christi Health Care.
On Feb. 22, Steward President and CEO Ralph de la Torre sent Jackson's Public Health Trust a letter indicating the firm's interest in buying Jackson Health and setting a March 1 deadline for the system to accept Steward's proposed terms in the course of due diligence. However, the Miami-Dade County Board of Commissioners subsequently ordered the Public Health Trust not to act on the letter.
De la Torre then reached out to city and county officials directly with another offer to strike a letter of intent to explore the transaction, but the commissioners on Tuesday deferred action on the letter.
“Since our letter of intent lapses as of Wednesday, March 16, 2011, we will await further delineation of a process to improve the stability of Jackson Health System. Should the process and timeline be conducive to our involvement, we will re-evaluate and engage at that time,” Steward said in an e-mailed statement.
Steward has estimated that Jackson Health will burn though all of its cash on hand and not be able to make its payroll by July without a cash infusion from Miami-Dade County.
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