MedCath Corp., Charlotte, N.C., announced plans to ask shareholders to dissolve the company while also announcing definitive agreements to sell two of its six remaining affiliated hospitals.
MedCath to sell two more hospitals, looks to dissolve
The moves were expected by stock analysts as far back as September, when they said MedCath could be gone within a year because the company's strategy of co-investing with doctors in heart hospitals has taken hits from regulators, market pressures and physician practice changes.
According to a MedCath news release, an upcoming proxy filing will seek shareholder approval to dissolve the company, sell remaining assets without needing shareholder approval and distribute the available net proceeds to shareholders. The filing is expected to be made during the company's fiscal third quarter, which ends June 30.
The proxy also will request approval of the sale of Arkansas Heart Hospital to the physician group AR-MED, both in Little Rock, and the sale of Heart Hospital of New Mexico to Lovelace Health System, both in Albuquerque. Both deals are subject to shareholder and regulatory approval and customary closing conditions.
The Arkansas Heart Hospital deal values the 112-bed hospital at $73 million plus a percentage of the available cash, with MedCath expected to net $60 million from the deal, according to the release. AR-MED is majority-owned by Dr. Bruce Murphy, a physician affiliated with the Little Rock Cardiology Clinic and a current investor in the Arkansas Heart Hospital, according to the release.
The agreement to sell the Heart Hospital of New Mexico values the 55-bed facility at $119 million. The company that currently owns the hospital is 74.8% owned by MedCath, which will receive an estimated $62 million in net proceeds on the sale to Lovelace, according to MedCath. Lovelace in its own release announced it plans to combine the heart hospital with 162-bed Lovelace Medical Center. Lovelace is owned by for-profit Ardent Health Services, Nashville.
Last week, MedCath sold six hospital-based catheterization labs and three mobile catheterization labs to a joint venture between Duke University Health System, Durham, N.C., and investor-owned LifePoint Hospitals, Brentwood, Tenn.
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